How to Create an Automatic Savings Plan

Do you have a savings account, yet find it difficult to find money to deposit into it? Do you have the best of intentions every month, but find you don't have enough left over after you pay your bills to pay yourself in the form of savings? In the word's of Michael Jackson, "You are not alone." Here are a few tips to help you make savings automatci

 

 

Today is the first day if America Saves Week. Today’s theme is: Save automatically.  Do you have a savings account, yet find it difficult to find money to deposit into it? Do you have the best of intentions every month, but find you don’t have enough left over after you pay your bills to pay yourself in the form of savings? In the word’s of Michael Jackson, “You are not alone.”

This isn’t an uncommon problem — most people find it hard to save. Generally, when you receive income it is either deposited directly into your checking account, or you make the deposit yourself, either at the bank, through an ATM, or via your phone.

And then your money heads straight to your checking account, so it’s available to pay the seemingly endless stream of bills.

It’s a vicious cycle, and one that’s hard to break. But fortunately, there is a way to break it: an automatic savings plan.

America Saves Week
America Saves, I save, You save!

Why Saving Money is Hard

You may not realize this (and may not feel that this is the case for you), but most people save money as an afterthought.

When they receive income (whether it’s a paycheck, freelance work, investments or other sources), their money is allocated to bills, groceries, rent or a mortgage. After paying for these expensive items, there may or may not be much left over to use for savings (or for fun). In this scenario, the only time someone adds money to a savings account is when there’s money left over from paying the bills at the end of the month.

Unfortunately, with this mindset, there is almost never any money left over to save. By the way, if you need to change your mindset regarding money, I have a FREE e-course which you can sign up for here.

So how do you break out of this pattern? Well, I’m glad you asked, because you know I have a plan for you!

The Answer: Automatic Savings

When you make deposits into a savings account automatically and regularly, you don’t have to think about it — the money is deposited before you have time to worry about expenses or how much money will be left over. Once you get used to it, you might not even miss the money.

Thanks to modern technology, it is very easy to set up an automatic savings plan.

First, you need a savings account. Open one at the bank where you have your checking account if you don’t already have one set up, and make certain your checking and savings accounts are linked.

If you currently have direct deposit through your employer, you will find the easiest (and most effective) way to establish your automatic savings program is to have part of your paycheck directly deposited into your savings account (the rest, as usual, will flow to your checking account to cover your bills). It doesn’t matter if it is $10 or $500 — simply setting this up automatically will ensure you save money every time you are paid.

If you don’t have direct deposit, there is still an easy option available: set up an automatic transfer from your checking account to your savings account every time you’re paid. For example, if you’re paid every other Friday, you could establish an automatic transfer of a set amount of money from checking to savings to coincide with this deposit.

 Just make sure you’re aware of when the money will be deducted each month, or you may find yourself overdrawn.

Don’t Touch the Money (Unless You Need It)

This last point could be the hardest: you’ll need to learn to leave your savings in your savings account unless you need it for an emergency. The idea is for you to get used to doing without that cash to cover regular, monthly expenses. If you tap into it every time you run a little short, there won’t be anything left when you really need it. Set up your automatic savings plan and then leave the money alone to grow.

You can see more way’s to make saving automatic here

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14 comments on How to Create an Automatic Savings Plan

  1. Tanyi Melvis Bechemnyo
    February 27, 2017 at 12:08 pm (4 months ago)

    Beautiful! I just never really thought about an automatic saving plan. I’ve had this problem for quite some time now.Thanks for sharing!

    Reply
    • tracie45
      February 27, 2017 at 2:34 pm (4 months ago)

      Saving automatically is the best thing that ever happened to me. I don’t even have to think about it. Thank you so much for reading!

      Reply
  2. Jennifer
    February 27, 2017 at 3:00 pm (4 months ago)

    Thank you for this post, it is so hard for us to save, I am going to look into the auto saving!

    Reply
    • tracie45
      February 27, 2017 at 7:09 pm (4 months ago)

      You are so very welcome! Automatic saving is the best thing since sliced bread. Let me know how it goes for you! Thanks for reading!

      Reply
  3. Vicki
    February 27, 2017 at 3:07 pm (4 months ago)

    Yes! Always pay yourself first. Remember to take advantage of automatic retirement savings also! The time value of money is a powerful thing!

    Reply
    • tracie45
      February 27, 2017 at 7:12 pm (4 months ago)

      I couldn’t agree more Vicki! Thanks for reading!!

      Reply
  4. Anne Bonhoure
    February 27, 2017 at 8:58 pm (4 months ago)

    This is a great post! I already have automatic savings set up, but I have trouble not touching the money 😛

    Reply
    • tracie45
      February 27, 2017 at 9:52 pm (4 months ago)

      Good for you Anne! Don’t feel bad, when I first started saving, I had the same problem, but that’s another post for another day. Thanks so much for reading!

      Reply
  5. shahin
    March 1, 2017 at 6:53 am (4 months ago)

    great ideas

    Reply
    • tracie45
      March 1, 2017 at 7:23 am (4 months ago)

      Thank you for reading!

      Reply
  6. Angie Fancher
    March 2, 2017 at 10:05 pm (4 months ago)

    Our local credit union use to take a certain amount of money that we would designate directly from our checks into a savings account. It was so great until they stopped doing that. I really need to look into having it automatically deposited into a savings account again. Great tips!

    Reply
    • tracie45
      March 3, 2017 at 9:20 pm (4 months ago)

      Angie, that is a great idea. I have a set amount of money go directly from my paycheck into an online savings account. I wonder why your credit union would stop something like that? It seems as if they would encourage saving. Thanks so much for reading!

      Reply
  7. Ngumabi
    March 3, 2017 at 6:41 pm (4 months ago)

    Nice post
    Its always like we need to have extra money before we save. But I learned its not the case. Thanks for sharing such great tips

    Ngumabi

    Reply
    • tracie45
      March 3, 2017 at 9:18 pm (4 months ago)

      That’s absolutely right Ngumabi. Most people thing that you have extra money to begin saving. Sometimes it’s just as simple as finding our money leaks and plugging those holes. If we look at our spending habit’s, I’m sure we can all find way’s we can cut back and apply those extra dollars to saving. Thanks for reading!

      Reply

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