Need To Save? Get Set to Automate

November 19, 2008 By Tisha (Kulak) Tolar

For many living paycheck to paycheck, it often feels like there is never anything left over to tuck into a savings account. Saving money may not be a priority and therefore will always end up feeling more and more like a struggle. There are a number of ways to start saving, whether it be to set specific savings goals or to budget your money with savings in mind.

One particularly simple way to save cash is to automate the process. By establishing and an automated withdrawal and deposit of funds from one account to the other, you are more likely to stick to your savings plan. One reason is because the automated process doesn’t allow you to get your hands on the cash that you are likely to spend. Many people find saving money to be a nearly-impossible task. Because of the onslaught of bills and expenses each month, they have a hard time making saving cash a priority.  They feel that whatever money is “left over” will go into the savings account and are surprised each and every time when there is no money left over.

By establishing an automatic plan to save, you essentially set your mind to accepting the withdrawals each time. You no longer have a reason to worry about what’s left to save and as time goes on and you see the account grow, you will likely become a more motivated, more confident saver.

How Automation Makes It Easy

Setting up an automated savings plan is pretty simple. In fact, there is more than one way to do automatically deposit a set amount of money into your account on a regular basis. The first way you can automate your savings deposit is through your employer. If you have signed up for direct deposit of your paychecks, you can complete a form that allows you to direct deposit the bulk of your money into one account and assign another amount to your savings account. This way, each time your direct deposit goes into the bank, you will add a little more to your savings account on a regular basis without any extra steps.

For those who do not have access to direct deposits, you can visit your local bank branch and request that your checking and savings accounts link together so you can establish an automated transfer from one account to the other. Again, with automated money transfers, you never have to touch the cash or remember to make a deposit.

Set It and Forget It

Once you start depositing money into your savings account, forget about that money. Of course, you should always keep your eye on your banking statement for errors but as for the money, forget you ever had it. Don’t fool yourself into thinking that you could “borrow” from your savings account unless it is for a true emergency. The likelihood of you paying yourself back early on is not realistic. Over time, as you begin to see the account growing, you may be less likely to use the money impulsively. But in the beginning, you have to learn to practice self-control and leave the money alone.

Keep the Accounts Updated

If you get a raise or other increase in income, don’t forget to make adjustments to your automated savings accordingly. Should you pay increase, it makes sense to have your savings deposit increase as well. Don’t forget to update your bank accounts and automated deposits of your paycheck. In the event you get a cash bonus or other unexpected windfall, plan to put it into the savings account and let it sit for awhile, otherwise it will probably burn a hole into your pocket.

Posted in banking, debt, personal behavior, savings

• Baseball Cards Sports Memorabilia -> Autographs, Original -> Baseball-MLB-> Trading Cards Baseball cards have been around for just about as long as the sport has and many of them have turned into very valuable collector items. Whether...
• Achieving A Bad Credit Auto Loan Isn’t Hard Achieving a bad credit auto loan isn’t hard to do, you maybe able to get an auto loan with the proper requirements and documents for the lenders pending the approval. There are a variety of...
• One big payment is not the answer When people get overwhelmed by debt, often debt consolidation is the first thing they think of to resolve the situation. Debt consolidation means that people borrow a large amount of money to use to pay...
• Dollar cost averaging and assumptions MyMoneyBlog recently had a post on dollar cost averaging.  In this post there is a reference to a paper by Knight and Mandell, the conclusion of which is that dollar cost averaging is not worth...
• Simple Steps For Creating A Debt Management Plan The number of people across the nation that find themselves holding thousands of dollars of debt increases each year and the numbers will continue to grow as the economy continues to slow.  Many people that...