Putting a little money away for a rainy day isn’t always easy and not everyone knows how to save money. You may have some good intentions, but at the end of the day, there just isn’t any money left. Somehow whatever you make, no matter how much, it’s spent before you make it to the next paycheck.
What if you found out that you could easily save money without making any changes to your current lifestyle? What are the best ways to save quickly and efficiently?
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Here are examples on how to save money by putting your savings on autopilot.
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, insurance, and utilities. 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 (minus taxes) and subtract all your core expenses. What you’re left with is your discretionary income. This will pay for things like entertainment, clothes, and getting your nails done. And from here on out, part of that discretionary income will go into a savings account.
Pick a number you’re comfortable with. Maybe that’s $50 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. Set up an auto-deposit to have the savings transferred to the new account.
Open a high-yield Savings Account
Open up a high-yield savings account at another bank; one that does not have a physical location. This way, you won’t have access to the money easily. Check with HR to see if they can split your paycheck deposit into different accounts. If you don’t see it, you’ll never miss it and your savings will run on autopilot.
Review your budget
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 and put it into the savings account. These would be things like birthday cash, tax returns, and bonuses. 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.
Contribute to your company’s 401(k) program
One last tip: Talk to your employer about matching 401(k) funds. You may be able to get a contribution match towards your retirement savings account. If they do offer 401(k) matching, try to commit at least to the max of the employer’s match. For example, if your employer will match up to 5% of your contribution, commit to a 5% deposit from your salary to your 401(k). After all, it’s free money so why not take advantage!
These are a few ways of how to save money by start putting your savings on autopilot. Once you’ve gotten into the habit of saving it will become second nature. Before you know it you’ll have a healthy nest egg that’s available when you need it.
Read more: 10 Reasons You Need a Budget
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2 comments
These are great suggestions. I am a financial coach and I especially like that you told people to open a savings account in another financial institution where it’s more difficult to access.
I hope to be a financial coach someday too 🙂 Thank you for reading!