I last talked about how to pinch money from yourself to help you save, but today I’m going to give you the next saving tip in the Cha-Ching series: setting up an automatic savings account.
An automatic savings account is separate from all your other bank accounts and helps you pay your future self first. It works by taking a certain amount of money from your checking account and placing it in your savings account every time you are paid or at a set time monthly. I know that when I am paid, I tend to spend that money immediately, but my friend Emily has had money going into her automatic savings account for 2 years, and so far, she has saved $1200. Every two weeks after her paycheck is deposited in her checking account, $25 is automatically withdrawn by the bank and placed in her savings. She didn’t even have to worry about taking money out herself to save because the bank was already doing it for her. I can tell you she was pretty happy having that money to fix her car when it suddenly broke down.
You may be thinking that $25 is a lot of money to take out of your paycheck, especially if you only work part-time. Although it’s recommended that you save 10% of every paycheck, it’s fine to start out with an amount you’re ok with and then slowly save more from each paycheck so that you have at least 6 months worth of your expenses in your savings account for emergencies. Sadly enough, accidents always come unannounced, so take advantage of your bank’s services so you’ll be prepared when emergencies come up. Automatic savings accounts make saving very fast and simple.
Can you think of other ways to save money?
Read how Anita pinches her money in Cha-Ching Goes Your Savings!