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Forgetting to save is your enemy | Updated: 8:28:28 PM, Thursday July 25, 2013
By Alex Wilson Forgetting to save is your enemy

Set up some simple personal helpers to assist in saving. You will be surprised at what works.
Image: Andres BigStock Photo

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Parents of text-addicted children, beware. Your wails and cries about the degradation of language, communication and relationships may all ring true, but a study has shown that text messaging does not damage your finances. Rather, they can help you to save.

I’m not referring to how much cheaper an SMS is than a phone call. I think by the time you’ve suggested a meeting point, a meeting time, changed the meeting point, agreed and confirmed a new one and then texted to say you are running late, text messages can be just as expensive as phone calls.

No, I refer to how the Wall Street Journal’s Nikki Waller has written about a study conducted by economists, where banks sent clients text messages encouraging them to save.

The results are encouraging, when the text message was tailored to a customer’s specific need and touted incentives or encouraged savings, bank saving increased by 16%.

As Waller states, the study challenges the idea that people don’t save because they lack self-control. Rather, it suggests that people don’t save because they forget.

So what does this mean for the rest of us, non-studied people?

Maybe it means that an important saving mechanism is automatic deductions and automatic reminders. So how can you set up your automated helpers to assist you to save?

Automatic deductions

These can be set up online or with your bank. When your pay comes in, part of it will be automatically sequestered to a savings account. The best part is, psychologically, you don’t feel like you are saving. Out of sight is, genuinely, out of mind.

Automatic bills

As long as you keep in mind when the bills need to be paid, setting up your bills to be automatically paid via direct debit could be just the ticket to ensure that you never have to pay a late fee again. How better to control your repayments on a credit card than to have a certain amount of money be paid off every week or month?

Automatic reminders

I love those little reminder notices on my computer, phone, fridge, landline and underneath my door (I find it very helpful to leave messages just underneath my door so I can’t get around it in the morning- sometimes I need to be forceful with my own forgetfulness).

Set up your phone to send you a reminder every pay day, if you are not automatically deducting from your wages, and divide your money between your bills, your savings and your discretionary spending. Set up automatic emails from your bank and from finance writers that you find interesting so you stay in the loop, and on top of what new incentives are out there.

Automatic motivation

I love a bit of automatic motivation. If you are finding it hard to stay on track and stay motivated, why not sign up to a motivational quotes. There are even some websites out there that exclusively focus on pithy remarks designed to enlighten you about your finances.

If you take advantage of some of the benefits of automated deduction and direct debit, you’ll have organised your savings plan efficiently and with very little pain. So you’ll have no need for a bank to text you every second of the day to keep you on your toes – it’ll already be second nature to you.

We’d love to hear how you keep to your savings plan. Feel free to comment below…

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Savings Guide Logo Alex Wilson is the founder and editor of Savings Guide, Australia’s number one saving money website. For regular money saving tips, visit Savings Guide or follow Savings Guide on Facebook. Share this article |


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