Life is full of doing tough financial decisionsbut saving shouldn’t be one of them.
If you ever feel like you are making so many decisions with your money that saving often takes a back seat and nothing happens at all (also known as decision paralysis), just try to automate your savings.
That way, you only have to make an active decision once and create mental space for other things, explained Perry Wright, a senior behavioral scientist at Duke University Common Cents Lab, a behavioral science laboratory focused on the financial well-being of low-income people.
“The best trick to save is to eliminate the decision to save,” says Wright.
Below, CNBC selection It explains how automating the savings process means you never have to think twice, plus another savings trick from Wright.
If you have to make a decision to save or to spend now, choose to spend, argues Wright, because you know you can always save later later.
Automating your savings ensures that decisions are already taken into account and it takes little effort to prioritize when other things come up.
When paid by direct deposit, you can set a percentage of your paycheck to be automatically transferred to a linked savings account with every payment. If you have an inconsistent source of income, e.g. As a freelancer or contractor, you might schedule a recurring deposit from your checking account into your savings at a time during the month when you typically have excess cash flow – possibly when your largest recurring bill comes in. Or, have all payments sent to your savings, and periodically transfer exactly what you need to live on to get your checks.
The habit of saving through automation is also highly recommended by Financial expert Sallie Krawcheck. Once you set it up and forget it, your money will grow over time and you will be used to living on a budget that saves for your future.
Let your money work for you and save more with high returns than with traditional accounts
CNBC Select ranked the Marcus from Goldman Sachs High Yield Online Savings a best overall selection for offering fees and easy mobile access. It’s the simplest savings account to use if all you want to do is grow your money without any strings attached.
In addition to automating your savings, Wright recommends creating separate accounts for different savings needs and goals so that you can save more over time.
“We are reluctant to spend money assigned to categories or uses,” he says.
A high yield option like that Ally online savings account is a consumer favorite as account holders can organize their savings goals by creating up to 10 different “buckets” within the same savings account. For example, they can create a specific fund for “future vacation” and another for “emergency savings”.
The savings account also has an easy-to-use mobile app and 24/7 live customer service available over the phone, online chat or the app.
On the safe side of Ally Bank
Annual Percentage Return (APY)
No monthly maintenance fee
Up to 6 free withdrawals or transfers per statement cycle * During the Coronavirus outbreak as per Regulation D, the withdrawal limit of 6 / statement cycle is waived
Excessive transaction fee
Offer a current account?
Offer an ATM card?
Yes, if you have an Ally checking account
Editor’s note: The opinions, analysis, ratings, or recommendations expressed in this article come solely from the CNBC Select editorial team and have not been reviewed, approved, or otherwise endorsed by any third party.