The psychology behind saving your change

Last modified 07/01/26

When it comes to getting your finances in order, establishing an emergency fund is often priority #1. Life has a way of throwing unexpected expenses your way. Car repairs, parking tickets, medical costs, natural disasters—the list goes on and on.

But, building your savings is easier said than done. It’s tough to forgo the instant gratification of spending today (you swear that $4.75 Venti White Chocolate Mocha is a NEED, not a want) in favor of some future hypothetical. Despite our best saving intentions, it’s all too common to find yourself with too many needs and not enough paycheck.

Say you only have a few bucks left over at the end of the month. Might as well blow through the last of it, right? Wrong. While it may feel like your spare change isn’t adding much value to your savings today, making a habit of transferring small, manageable amounts into your savings can have a tremendous impact over time on both your cash reserves and your mindset.

Saving is an easy habit to start

This isn’t merely speculation—the power of taking baby steps to reach one’s larger goals is a proven method. B.J. Fogg, a Stanford University psychologist and researcher, champions tiny habits as the most practical and effective way to establish new, positive behaviors. “When you achieve a goal by integrating simple daily habits into your life, no matter how small, you gain a confidence that helps pave the way to reach bigger goals,” explains Fogg.

Major goals, like paying down debt or losing 50 pounds, can feel unattainable and overwhelming, to the point where we lose motivation and stop working toward them altogether. But, by training your brain to recognize small milestones as daily achievements, you can change your long-term behavior without relying on (sometimes highly-fluctuating) willpower.

Make it automatic and hands-free

Varo’s Save Your Change feature is grounded in this psychology. It’s a financial health tool that can help grow your savings by hundreds of dollars per year through bite-sized, attainable adjustments. And by automating the process, we’ve made it simpler than ever to commit to saving. No willpower needed.

When you turn on Save Your Change, you create a daily savings habit through tiny, automated contributions. Varo will automatically round up your Varo Bank Account transactions (that’s either a purchase with your Varo Visa® Debit Card or an automated bill pay) to the nearest dollar, and transfer the difference directly into your Varo Savings Account1.

Now, your $4.75 latte comes with a side of 25 cents in savings. You’ll hardly miss that quarter, and the act of saving 25 cents benefits both your psyche and your savings account. Before you know it, you could accrue a sizable savings balance with little to no effort. In fact, you could probably add an extra $365 or more to your savings in the next year2.

Varo also rewards savers with a high-interest rate of 3.75% Annual Percentage Yield (APY) on the first $5,000, for qualifying customers3, so every penny saved is working to make you more money.

At Varo, we believe your bank account should play an active role in helping you achieve your financial goals. Automating a bite-sized savings contribution provides you with a daily financial win—and can help lay the groundwork for reaching larger monetary milestones.

Get started today or click to learn more about the Varo Savings Account!

¹ All transactions include purchases made with the Varo Visa Debit Card; direct debits (“ACH Debits”) from your Varo Bank Account by merchants, utility service providers, and other financial institutions; ACH transfers from your Varo Bank Account to another bank account you own using the Mobile App; Bill payments (“Bill Pay”) to third-parties made from your Varo Bank Account using the Mobile App.

² This amount is based on making two transactions a day for a total daily roundup of $1.

³ To open a Varo Savings Account all you need is a Varo Bank Account. Applying won’t impact your credit score, plus there are no monthly fees, and no minimum balance required. Annual Percentage Yield (APY) is accurate as of July 1, 2026. Start earning 1.00% APY, then qualify to earn 3.75% APY on your balance up to $5,000.00 next month by 1) Receiving direct deposit(s) totaling $1,000 or more; and 2) Ending the month with a positive balance in all your Varo Accounts. Rates subject to change at any time.

Qualifying direct deposits are electronic deposits of your paycheck, pension or government benefits (such as Social Security or unemployment) from your employer or government agency to the extent that can be identified. Tax refunds and government stimulus payments, Person-to-Person payments (such as Venmo or Varo to Anyone), and funds deposited using a Varo routing number are not considered a direct deposit.