The Case for Automatic Savings

Even if you’re already a good saver

Automating one’s saving’s—the act of setting up recurring contributions to retirement, college, emergency savings accounts, etc. is such a popular idea amongst financial advice givers that we’ve adopted the catchy phrase “pay yourself first” as a way to make what feels like a boring adulting task sound appealing and self-indulgent.

As a financial advice giver, I’ve seen the importance of automating savings, especially in working with clients who struggle to meet their savings goals. But it’s taken me awhile to fully jump on board with this in my own financial life. I wrongly assumed it was a more useful strategy for folks who struggled to save money, rather than for folks who enjoyed saving money. 

To be clear, I hadn’t completely resisted automating my savings. Things like paycheck deductions for work-based retirement accounts have always been an obvious choice to me, but I’ve only come around to automating other types of savings over the last few years.

For me, there were two major points of resistance. Both were more psychological than financial.


The first is that I liked waiting until the end of the month or the year to move money into certain accounts in case of some unexpected expense arising.

Even though it’s extremely easy and non-punitive to move money back and forth between savings and checking accounts these days, I felt like it would be better to have the money handy if something came up, so I didn’t have to get into my savings to cover it. For those who might be quick to point out that that by not putting the money into savings in the first place, I was basically taking it from savings, I know that. I didn’t say this was a rational choice, just one that was sating a certain psychological need for me.


The second was related to how I feel every time I actively move money towards savings.

After many years of working with people around money, I’ve concluded that this notion that there are savers and spenders in the world is mildly accurate but also harmful, because it often makes one group seem disciplined and the other frivolous. Rather, I think it’s more accurate to say that there are people who get a high from saving their money, and people who do not.

Just like I, the slowest and most uncoordinated runner on earth, can’t fathom what a runner means by the term “runner’s high,” a “spender” might think the notion of getting a high every time they put money into savings cannot possibly be a real thing for people, but it is. Some people, from a very young age, just enjoy the act of saving money to put towards long term goals or to have around for a rainy day, and I happen to be one of those people. I enjoyed the act of keeping my spending intentional all month, with the goal of being able to transfer the biggest amount possible to my various savings or retirement accounts at the end of the month. 

Armed with these two excuses, I had wrongly convinced myself that in most cases, automated savings was tool for people who didn’t enjoy saving money, and there wasn’t any real benefit in it for me.

savings and spending charts on a laptop screen

But a few years ago, I started to notice a guilty pull that came every time I was moving money into savings. I like to save in categories – retirement, emergency, outdoor recreation, vacation, home improvement projects, etc. And I started to notice my dopamine hit being interrupted by a little bit of guilt about how much I was putting towards each category at the end of the month. I wanted to put a certain amount towards a vacation or outdoor recreation, but I felt like I should be putting more towards retirement or emergency savings.

Realizing I felt most guilty about pulling money from my future self to fund today’s fun, I set up an automatic transfer to my individual retirement accounts to alleviate this tension. Confident that I was now automatically contributing what I wanted to be to retirement accounts, I felt better about saving the extra for the fun stuff. About a year later, I realized that emergency savings was the other source of tension for me. Though I had as much as I wanted saved up for a rainy day, I also wanted to make at least a small contribution to this account each month, so that if I ever needed my emergency fund, it would have more than enough in it to cover my emergency expenses with some left. So, I added another automatic transfer to my emergency savings account.

The psychological payoff of these two choices has been significant.

I’ve gone from feeling like someone who didn’t need or wouldn’t benefit from this strategy, to becoming sold on it. I’ve realized that it’s not just a strategy for spenders, it’s one that could really benefit savers as well.

For me, there have been many significant payoffs to adopting this strategy. The first is that I have virtually eliminated guilt around which savings goals to prioritize. I still enjoy actively moving money into savings, but now it’s mostly for the near-term projects or recreating that I want to do, and I feel good about that now that the boring stuff is being funded behind the scenes.

I’m saving more. I find that I still like the challenge of having quite a bit left over at the end of the month to put into savings and have worked out new ways of reducing spending on less important items so that I have more leftover to save for the things that are important to me.

It’s also fun to see things grow that I’ve forgotten about. Like the old “watched pot never boils” adage, there have been times that I felt like it would take forever to reach certain savings goals. Now, with these automated transfers, I’m pleasantly surprised to see the value in my emergency fund or Roth IRA has grown, even though I didn’t consciously think about moving money into it.

The role that automated savings can and should play for all of us is different. For those who struggle to save, this type of savings is essential not just for things like emergencies and retirement, but also for smaller goals. But I realize now that it was a mistake to think it couldn’t add benefit to my financial game.

It’s helped me save more and feel better about the money I do save or spend to enjoy life today, and it’s added a layer of purpose and intentionality to my finances.