Are you having a hard time keeping a lock on your wallet? It can be hard to have the willpower to not touch any of the savings that you set aside. This is why you may want to look into an automatic savings account.
This plan automatically sets aside money into a separate account, which makes it harder for you to use that money for impulse purchases.
Advantages of Automatic Saving Accounts
Most people don’t have a set plan for how much money they want to save with every paycheck they get. This will often lead to them not valuing the importance of their savings, and can lead to them using up their whole paycheck without putting anything aside for savings.
With an automatic savings account, you never get a portion of your paycheck to spend in the first place. It goes straight to a separate account where you don’t have to worry about spending it. Here’s a short list of the some of the advantages:
As silly as this sounds, this way of saving can help improve your fiscal responsibility. Because you’re consistently setting aside cash that you earn, you are teaching yourself to live on a smaller amount. This will show you how to get more out of your dollar, and will provide you habits of timid spending that will help structure your life now and in the future.
People save up money for many different reasons. Whether it be for retirement, house payments, or even buying a new car, automatic savings accounts have you covered. You can set up multiple accounts that will help you save for each goal you have in mind, allowing you to easily and accurately set up clear paths to each payment you want to make.
When you set up your accounts, that’s about as much effort as you need to put in. The account keeps going without your input, meaning that the process is so easy you don’t even have to worry about messing with it. No more strenuous math on your part, once you set up your account you can sit back and not have to worry about your savings.
Setting It Up
- Set up a savings account
- Set up a saving account if you haven’t already. Then link this account to your checking account so you can freely transfer money back and forth. An easy way to do this is to set up a checking and savings account with the same bank.
- Set Up a Direct Deposit
- Set up your paycheck to be sent directly into your savings instead of your checking account.
- Figure Out Your Financing
- This is one of the most important parts of the automatic savings account process. Look over your expenses and calculate how much money you need to pay off any necessary bills for the month. Think about things such as grocery spending, housing payments, toiletries, entertainment etc.. This is different for everyone, so make sure you double check your math!
- Split Up Your Total
- Once you have figured out how much you need for your expenses, split up your remaining money into your savings account.
- Set Up Your Automatic Savings Account
- Now that you have calculated how much money you can pull out of your paycheck for savings, it’s time to set up your automatic savings account. Set it up to where your paycheck gets deposited into your savings first, for it to be deposited into your checking account a few days later.
- Verify the Results
- Now that you have your account set up, monitor it! Make sure that you are getting enough money to live comfortably, and saving enough to reach your goals in the future. If you realize that you miscalculated, or want to make a change, you can always adjust your accounts
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Bottom Line of Automatic Savings Accounts
Set it and forget it! It’s time for you to meet your future spending goals, and automatic saving accounts are a great way to reach them.
If you find yourself not being able to hold onto your money then make sure you look into this type of account. Consequently, it might let you save big!
If you find these posts informative, be sure to check out more of the on HMB! Also check out our posts for the Best CD Rates and Best Bank Savings Rates!
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