Put Your Savings On Autopilot
Putting a little money away for a rainy day isn’t always
easy. You may have some good intentions, but at the end of the day, there just
isn’t any money left. Somehow whatever you make is spend before you make it to
the next paycheck.
Start by making a personal budget. Take a look at what you
bring in each month. Next, write down your fixed expenses. These are things
like rent, car payments, utilities etc. Figure out how much you need each month
for groceries and other essentials. This is your bare bones budget. It’s good
to know what you need to get by each month.
Next, it’s time for a little bit of math. Start with what
you bring in each month and subtract all your core expenses. What you’re left
with is your discretional income. This will pay for entertainment, clothes, getting
your nails done etc. And from here on out, part of that discretional income
will go into a savings account.
Pick a number you’re comfortable with. Maybe that’s just
$20 per month, maybe it’s $500. Put it in your budget and treat it like any
other bill. It won’t take you long to get into the habit of setting aside that
money for savings.
To make it even more hands-off, talk to your bank about
setting up a separate savings account. Then set up an auto-deposit to have the
savings transferred to the new account as soon as your pay check comes in each
month. If you don’t see it, you’ll never miss it and your savings will run on
autopilot.
Don’t forget to audit your savings from time to time. Take
another look at your budget. Can you increase your savings a little more?
Another great way to boost that savings account is to take any extra money –
thinks like birthday cash, tax return, bonuses etc. – and put them straight
into the savings account. Again, you won’t even miss the money, but it will
help you build up your savings quickly.
Make sure your savings are sitting in an interest-bearing
account. Since you won’t be touching this money unless it’s a dire emergency,
you should be able to earn at least a little interest. Talk to your banker
about your best options and start putting your savings on autopilot.
One last tip: Talk to your employer about matching 401K funds. You may be able to get a contribution from the company you work for towards your retirement savings account.