How to automate your savings

All too frequently, we get our paychecks, pay our bills and before the next paycheck has arrived we are scraping pennies together to put gasoline in our vehicles. Savings is not something that most of us do on a regular basis. There are steps you can take to automate your savings that can be painless. Once you get accustomed to taking the "hit" you will likely learn to live without the money you are saving. Here are some simple ways you can automate your savings.

401(k) and Retirement Savings

Today, nearly every employer offers some type of automatic investment plan into your 401(k) or retirement plan. These funds will generally be taken out of pre-tax earnings and deposited directly.  Some employers also offer employees the opportunity to add additional funds from after-tax dollars as well.   Taking advantage of these plans offers many benefits and can help automate your savings.

Checking to Savings

Contact your bank and find out if they offer a checking to savings option.  Some banks offer a variety of different programs that allow you to easily transfer funds directly from checking to savings accounts without you having to take any action. This can be especially helpful if you have set up automatic payroll deposit.  You could direct your bank to transfer a fixed amount from your checking account to your savings account every week.  Often, banks make it more difficult to transfer from savings to checking, making it less likely that you will dip into your savings unless absolutely necessary.  Bank of America also offers an interesting option - if you use your debit card for purchases they "round up" to the next dollar and roll the "pennies" into your savings account.  This automates your savings and can be a pain-free way to save.

Direct Deposit

Many employers allow you to split your direct deposits over more than one account.  When you set up your direct deposit for the first time, put a small amount directly into your savings account. This method of automating your savings lulls you into using only checking account deposits to pay bills, shop and spend until your next paycheck.

Online Options

There are a few online options that you can utilize to automate your savings that you may not have considered. If you have an active AdSense account linked to your blog, you can direct those deposits to go to your savings account.  Since these deposits may be irregular for some (i.e. you have to have a one hundred dollar balance before they are paid) you will be less likely to depend on this account for regular expenses. Depositing your AdSense earnings directly to your savings account allows you to automate your savings.  Helium earnings that go to your PayPal account can also help automate your savings.  Set up a goal of having a certain percentage of your Helium earnings monthly go directly from your PayPal account to your savings account. This helps automate your savings and may even encourage you to earn more.

Summary

There are many ways that you can automate your savings. These are merely a few options. Before you are able to spend your entire paycheck, go ahead and automate your savings and build up your nest egg. For more information regarding opening a savings account, you can check out Central Bank's Personal Savings page or you contact one of our local branches.

This piece was written by Amanda Hash and used with permission.