We are constantly faced with decisions on whether to spend or save: Buy a brown sugar milk tea from LiHO or settle for a teh bing from the coffeeshop? Indulge in some online shopping whenever we receive a new promo code or make time to periodically review our budget?
As time passes, these seemingly inconsequential decisions add up in ways that shape our financial health. It’s not always easy to stay committed to our money goals but the good news is there are simple but powerful things we can do when our willpower fails us.
Automate your savings
Saving and investing may seem difficult when you have dozens of competing priorities, but putting money aside regularly is the foundation of wealth building. Automating your savings is an easy way to ensure you follow through on your saving goals.
Decide on an amount you can commit to saving consistently and have it transferred automatically from your checking account to a separate savings account every time your paycheck comes in. Automating this process means you don’t have to think about saving – making it much more unlikely you’ll “forget” to set aside money in your savings account after spending and paying bills.
Not having all your money available in your checking account naturally means you’ll spend less on the things you don’t need. You’ll tend to spend more consciously knowing that you would have to transfer money from your savings account to your checking account if you overspend.
Automate your investments
With your savings on autopilot, the next important step is to set up automatic investing. Saving is important, but investing is critical to building wealth.
One strategy to get into the habit of regular investing is dollar cost averaging. The idea is that by consistently investing a fixed sum of money over a period of time, you end up buying more shares when prices are low and fewer shares when prices are high. Over the long term, the cost of all your investments purchased are averaged out.
Because you’re investing consistently regardless of market conditions, dollar cost averaging helps investors curb the tendency to time the market or give in to certain investing biases. For a more effortless way to build wealth, the dollar cost averaging process can be automated as well when you invest with a digital wealth manager such as Syfe.
If you’re a Syfe client, making automatic deposits into your Syfe account is as simple as setting up a recurring transfer from your checking account with your bank. You decide how often you want to invest (weekly, monthly etc.), your investment amount, then confirm and submit your recurring transfer request to your bank.
For detailed instructions on how to set up a recurring transfer from DBS and POSB Bank, OCBC Bank, Standard Chartered Bank, UOB Bank and TransferWise, please refer to the relevant links. Each time we receive your automated deposit, we will send you a confirmation email to inform you that your funds will be invested in your selected portfolio.
Automate your bill payments
If you’ve automated your savings and investments, automating your bill payments is the next logical step. This ensures your credit card or other payments are never late so you don’t incur costly late charge fees and interest charges. Setting up GIRO payments to pay your bills is hassle-free, and since those bills will be paid automatically, you also free up your own time for other things that matter.
Take willpower out of the equation
Staying on track with your long-term financial goals requires a lot of willpower and effort. Automating your finances bypasses the stress of staying financially disciplined at all times and makes it easier to reach your goals. By taking some time to set up all your automated processes today, you’re setting yourself up for future success: saving and investing more, spending less, and saving valuable time.