Trying to save more MONEY? Don't worry, we got you...
AUTOMATED SAVINGS....Cha-Ching !!!!
The absolute easiest way to save money & hit your money goals is making your savings automatic.
We’re going to explain why it’s so easy & how it makes it emotionally easier for you.
What is AUTOMATED SAVINGS, you ask? (you might not have asked but we’re telling you anyway)
AUTOMATED SAVINGS is when you set up a portion of your paycheck to directly deposit into your savings account every time you get paid.
The reason why it is so amazing is because once that direct deposit hits your savings account - the work is already done for you. There’s no emotion or separation anxiety involved.
This forces you to make decisions based on the money that is left. If you get paid $2K a check and have a $500 automated savings - you have no choice but to work with the $1500 you have left.
"Yeah but sometimes I dip in my savings account…"
If you are someone who may not have self-control all of the time, we advise opening an online savings (this makes your funds less accessible) or a 12-month CD that charges you HUGE penalty if you withdraw anytime before 12 months.
Here’s a scenario (sorry we love scenarios lol) :
It’s the NEW YEAR & everyone is talking New Year Resolutions! You're excited for a fresh start and the goals you want to accomplish this year. One of your goals for the year is saving more. Your money goal is to have $12K saved by the end of the year.
Your plan is to save $500 a paycheck ($1K a month). You get paid twice a month and you bring home $1500 (after taxes) each paycheck. You understand that $500 out of $1500 is 1/3 of your pay but you’re up for the challenge.
The way you plan on reaching your goal is by paying all of your bills FIRST and once the bills are taken care of - you plan to move $500 over to your savings account. Sounds easy enough.
The year begins and its time to get it started. You’re excited & you’re ready!
January you were amazing ! You start off HOT!!! You moved over $500 on the 15th & then another $500 on the 31st - both paychecks ! Your savings is looking GOOD with a healthy band, rack, grand, thousand - whatever you want to call it, you have $1,000 in there and you’re well on your way to $12K.
February 15th paycheck hits and you & your boo are on a little baecation for Valentine’s day. You’re in love, bills are paid so you’re feeling great. During your love-filled weekend you end up spending that $500 that was supposed to go to savings this paycheck. You say to yourself - “No biggie, I’ll just put $1,000 on the next check to cover it”. Couple weeks later, February 28th paycheck comes, and March rent is due along with other bills. With all of these bills, you’re only able to put $500 into your savings.
Now, its the end of February and you only have $1,500 in your savings. Not a bad place to be but you know you should be at $2K by this time of the year.
Let’s fast forward to March. Winter is coming to an end and you need some new tires & brakes for your car. You get them, and it sets you back $600. This month you end up only moving over $400 to your savings.
End of March and you’re savings is only $1,900 - you’re $1,100 short of where you should be - $3,000.
This all happened because you didn’t pay yourself first. Once you pay yourself first - you have no choice but to spend what’s left. With the money left over after your automated savings comes out you might realize that maybe a baecation for Valentine’s day isn’t the move, and you choose a staycation instead. Maybe you don’t get the new brakes & tires all at once. It’s possible that you just do the brakes now and do the tires next month.
There’s a psychological thing that takes over you when you can’t actually see the money in your account. Simply put, if you see the money in your available checking account balance, you’re going to spend it! If you don’t see it, you won’t spend it because you CAN’T SPEND IT - it’s not there !
Sooooo after reading this BLOG, what are you going to do?
Go to your HR or Payroll person tomorrow at work and ask them if you can adjust your direct deposit information. Next, add your savings account info & the specific amount that you want to save per paycheck ASAP!!