How to automate your savings (and the benefits of doing it!)

How can I automate my savings?

There are several ways to set up transfers into your savings so it happens automatically.

Direct debit to a savings account

It's quick and easy to set up a regular direct debit from your bank account to a savings account. You can choose how often to send money to your savings, such as weekly, fortnightly or monthly, and how much to send. It could be a good idea to align this with when you get paid, so that a portion of each pay cheque will go straight to your savings account.

You can set up an automatic direct debit transfer in your Internet banking portal or via your mobile banking app. If you can't find the option for this yourself, you can use the bank's live chat feature to ask how to set this up.

Digital savings tools

Some bank accounts have a sweep facility, which automates transfers to and from a linked savings account. All you have to do is set a minimum and maximum limit for your transaction account balance, and your bank will automatically "sweep" funds between the two accounts while making sure your balance stays within the limits you have set. This makes it easy to earn the maximum interest on your savings but also have sufficient access to spending money.

Some also offer a round up too, which rounds up each transaction you make to the closest dollar value as set by you and puts the remaining money into your savings. For example if you made a purchase that was $4.50, it would round up the purchase to $5 and add the remaining 50 cents to your savings. It might seem like a small amount, but if you make several purchases a day this could add up to a lot of money over the course of a few months or a year.

Invest your spare change

Similar to the savings round up tool offered y some banks, you can also find third-party apps that do a similar thing. One example is Raiz, which takes the spare change from your purchases and invests it in a portfolio of exchange traded funds (ETFs) based on your financial goals and risk tolerance.

Direct debit to a superannuation account

While your employer makes compulsory contributions to your super fund, you also have the option to make voluntary contributions yourself. You can set up a process called salary sacrificing, which means a pre-determined amount from your regular pay cheque will be automatically sent to your super fund instead. This is an easy and tax-effective way to automatically top up your retirement balance.

There are also apps that can help you automatically save money into your super too, such as Grow My Money. This app gives you cash back on your everyday purchases made via the app and adds the cash you earn straight into your super fund automatically.

Expert insight

"Personally, I find nothing more satisfying than using my Grow My Money app to watch the future value of my superannuation balance increase, with every purchase I make. When those contributions are paid across each month to my super, I know those contributions become worth tenfold, thanks to a long time horizon, and compound interest. "

Pascale Helyar-Moray OAM

Founder of Grow My Money and author of Rich Woman, Poor Woman.

What are the benefits of automated savings?

• It's quick and easy. It only takes 5–10 minutes to set up everything required to automate your savings. This will not only save you plenty of time in the weeks and months to come, it's also a great weapon to help you save money.
• It's convenient. Automating the process takes the hard work out of saving. When funds are automatically deposited into your savings account, you don't have the hassle of manually transferring savings funds every time you get paid.
• It takes matters out of your hands. Automating your savings means you don't have to rely on your own financial discipline (or lack of!) to ensure your nest egg keeps growing.
• It's a set-and-forget strategy. Once it's set up, you don't need to remember to send money into your savings again. It'll be done for you.
• Your balance grows all the time. Every time you get paid, a portion of your pay cheque goes directly to your savings account. This means that your balance increases every week, fortnight or month, and the power of compound interest also kicks in to provide an even bigger boost.
• You can achieve your financial goals. As your savings balance builds without you having to lift a finger, you can reach your financial goals without even realising it. Whether you're saving for a holiday or even a deposit for a house, an automated savings plan can help you get there.

Expert insight: Use automation to supercharge your savings

"The secret to success with money is automation! When you establish automated transfers, be sure to automate not just your savings, or pay yourself first, but also your everyday living expenses and your bills, each to separate bank accounts.

This is the simplest way to remove stress from your money and avoid overspending, hence ensuring you not only manage your day to day money, but also your future self. The key to success, and biggest challenge with automated money transfers is to ensure you don't feel constrained by the limits you place on your lifestyle expenses. Success with money is not about restriction, but flow."

Andrew Woodward

Wealth coach & finance expert

Finder survey: Do Australians automate their savings?

Deciding how much to save

The first step when developing an automated savings plan is to work out exactly how much you can afford to save. To do this, you first need to create a budget.

Look at how much money you have going out each month (and where it's going), and where you have capacity to cut back and save. Once you’ve done this, you should be able to work out exactly how much you can afford to put aside from your weekly pay cheque to contribute to your savings account, super or other investment account.

It's also a good idea to keep some money aside in an emergency fund for any unexpected, large expenses that pop up. This way, you shouldn't need to dip into your savigs right away.

Frequently Asked Questions

• Does CommBank offer a roundup savings tool?

  No, CommBank doesn't offer a specific tool that rounds up your transactions. It does offer spend tracking and categorisation tools to keep a close eye on your spending. and a Smsrt Savings tool that suggests how much you can save.

• What is the roundup saving method?

  This involves rounding up your transactions to the nearest dollar amount and sending the remaining money into your savings, super or investment account.

• What is an automated savings account?

  An automated savings account is one that you've set up to send money into automatically each month. By sending money into the account automatically, your savings will continue to grow and benefit from compound interest.

• Should you automate your savings?

  Automating your savings is a great way to make sure your savings balance is growing without you having to remember to add to it.

Written by

Tim Falk

Writer

Tim Falk is a writer for Finder, writing across a diverse range of topics. Over the course of his 15-year writing career, Tim has reported on everything from travel and personal finance to pets and TV soap operas. When he’s not staring at his computer, you can usually find him exploring the great outdoors. See full bio

Co-written by

Alison Banney

Editorial Manager, Money

Alison is an editor at Finder and a personal finance journalist with over 10 years of experience, having contributed to major financial institutions and publications such as Westpac, Money Magazine, and Yahoo Finance. She is frequently quoted in media outlets like SmartCompany and SBS, offering expert insights on superannuation and money management. Alison holds a Bachelor of Communications in Public Relations and Journalism from the University of Newcastle, and has earned three ASIC RG146 certifications in superannuation, securities and managed investments and general financial advice, ensuring her expertise is fully aligned with ASIC standards. See full bio

Alison's expertise

Alison has written 656 Finder guides across topics including:

• Superannuation
• Savings accounts, bank accounts and term deposits
• Budgeting and money-saving hacks
• Managing the cost of living