Start Saving Automatically: Using automated payments to reach your savings goals
- February 27, 2020
- By: Greenpath Financial Wellness
Your Future Self Will Thank You for Saving Money Now
Imagine your future self: you look really good in those sunglasses, you just got a flirty smile from your crush, and things are going pretty great. You hop into your car to head to work, and… Nothing. Car won’t start. Fast forward to the desk at the mechanic shop…your alternator is bad. $800 between you and being back in the having-transportation-business. You think to yourself:
New alternator? No problem. I’ll just take it out of my savings account.
Then you go about bein’ all cute in those glasses, idk, maybe you’ll get a raise next week. Life is still good.
Your saving habit is about funding your future — whether you need an emergency $1,000 tomorrow, or you’re looking to retire in 30 years.
How to Start Saving Automatically
One of the easiest, and the most effective, strategies is to save automatically. Automation makes it easy to stick to your plan and your promise to your future self. Start by deciding how much you can save every month. If you aren’t sure, this spending plan worksheet can help you figure out how much you have, and what’s already committed to bills and expenses. Even if you are saving a small amount, it’s worth doing.
3 Ways to Automate
- Set up an automatic transfer once a month. Every month, have your bank or credit union transfer a fixed amount (like $25, $50 or $100) from your checking account to a savings or investment account. Talk to your local bank or credit union to set this up.
- Direct deposit from your paycheck to savings. You’ll never even know it’s gone. Every pay period, have your employer deduct a certain amount from your paycheck and deposit it in a savings account. Talk to your HR person or whoever handles payroll to see if you can set this up.
- Max out any retirement benefit your company offers. If your employer offers a retirement account, sign up and put in at least the minimum contribution to receive any matches they may offer. Ask your HR person for more info.
Save Money on Debt — Automatically
- Never pay a late fee again: Set up automatic payments towards your debt by providing your checking account information to your loan provider to ensure that the payments are on time and in full.
- Maximize your budget for paying off debt faster, and use auto-payments to help you stick to your schedule. Round up your payments to accelerate your progress. The faster you pay off debt, the more money you save on interest and fees.
- Find out if enrolling in automatic payments qualifies you for a small interest rate reduction with some types of loans and providers, such as some student loans.
If you have a monthly payment on a loan, check out Simple Payment Plan. It divides your loan payment up into smaller withdrawals from each paycheck, and then automatically pays it before the due date, which makes it a little easier to add a couple extra dollars to every payment and pay it off faster.
Save Money by Paying Off Debt
If you look at your budget and find that you’re spending all your extra money on debt, you might want to make a debt payoff plan. Talking to a financial counselor will help you get your whole financial picture in focus and explore the different options available to you.
Let’s Make a Plan Together
GreenPath offers free financial counseling and education to support people in meeting their financial goals. Our professional, caring financial coaches will work with you to assess your situation, explain the options or solutions available, and help you create a spending plan to meet your goals. It’s free, confidential, and no pressure.