I know that many people say they cannot find ways to save money for a number of reasons. I think that while saving may be difficult at times the only way to really get started is to automate your savings.
Think about the way that most people budget. They set aside money to pay bills and then if there is money left over at the end of the month then they put that into savings. This is the wrong way to do it as you will never be able to build up a savings base as there will usually be something that prevents money from being left over at the end of the month.
Instead of trying to save what is left over at the end of the month I make my savings come out the same way that my other bills come out of my account. Since I use ING as my main bank I have my salary direct deposited to that account. I then have an automatic transfer set up at the beginning of the month that takes my savings amount to a sub account in ING.
It is all done automatically and I don’t have to worry about whether it gets done or not. I have no excuse for not saving because ING does all the work for me. The only reason the savings would go down is if I raid the savings account to use the money to pay for something.
I build my budget based on what is left and that works well for me.
Very true. That’s a good point because you’ll be saving without really even noticing…That way when the end of the year rolls around, you’ll see a big sum in your accounts!
Doesn’t your work do this for you, say, for 401k contribution and stuff?
Yes it does but a 401k is long term savings that you cannot easily access. I am talking about short term savings that I can get in a few days. We all need to have some sort of access to cash, especially those of us who operate on a mostly cash-less system.
Do you have the option to invest that money in your ING acct, or does it only earn petty savings rate?
I’ve looked into sharebuilder when it first came out in 2000/2001 – very good idea and was able to set aside each month from bank acct that goes towards a fraction of a share of any stock.
I totally agree – I love my ING account. My setup is the opposite – I have a checking account at my local bank, but use ING for my savings. I love that it is directly debited from my account so I don’t have to think about saving.
I am certainly one of those who don’t know how to save money. That’s really a great tip. We must think about savings just like we think about bills. So if we can take out money for bills, we can take out money for savings as well.
You are so right, save a set amount each month, then manage on what you have got left, and it works!
It’s really very good way of save money. I can’t control my expenses and that’s reason it’s good for me.
This is a good tip. Last year I switched my bank account to automatically deposit a set amount into my retirement savings account. Now I don’t even notice that amount coming out of my account. It has just become another monthly bill. I should try the same strategy with a more short term savings account such as ing.
Now I don’t even notice that amount coming out of my account. It has just become another monthly bill. I should try the same strategy with a more short term savings account such as ing…
Its true that being automated will save some more money in terms of billings where in you don’t need to ride a cab, taxi or whatever to go to the mall and pay your bills you just need an internet connection and that’s it.
I always find it difficult to save anything even after a good monthly income and some of my friends who are earning less than me always manage to save good amount each month.
When I started the job I’m at now, about 2 years ago, I set up my direct deposit to split into two accounts, so I have 90% of my check going into my checking and 10% going into my savings account. Like you said, out of sight out of mind. I never even miss the money, much less think about it…. all the while my savings account has been growing! It is a great way to save money… even though its only 10% it definitely adds up quick and also gives me some piece of mind knowing that I am saving money!