The Psychological Effects Of An Automatic Savings Plan

Last month, I started an automatic savings plan with HSBC Direct and so far, I realize that it has had some effects on my mentality towards the plan.

Feels Like A Monthly Expense
My plan was set to transfer money on the last day of every month (probably so is everyone else’s). The plan is similar to the monthly expenses that everyone must pay for, such as the phone, cable, or internet bills. And the end of every month, it feels more like a financial burden than a conscientious step towards financial stability.

Makes Me Find A Way To Fund The Plan
At $50 a month for a college student with little to no income, it certainly is a task that will make me worry whether I have enough to deposit. Therefore I’ve been putting aside money and saving EVEN more than I already do. Instead of eating fast food, I’ve brought sandwiches for lunch when I go intern.

Simulates A “Grown-up” Life
The automatic savings plan serves as practice for the things that one would have to pay for in the future. Everyone has to be aware that they have to pay rent, utilities, and other stuff. But instead, this is money that you are not losing.

These effects are not bad at all. I feel like I’m struggling to make it work but in the back of my mind, I know I’m doing the right thing. Simply canceling the plan is not what I want to do.

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