Automatic savings is quite possible the best thing that’s ever happened to the savings account. In the old days, you had to go to the bank and deposit money into your savings account every week or every month. It was way too easy to procrastinate and skip your regularly scheduled contributions to your savings. Automatic savings contributions, though, made everything much simpler.
Adding money to your savings through automatic contributions couldn’t be any easier. There are multiple ways to make it happen and sometimes even a benefit to using it. Here are a few of the types of automatic savings contributions I’ve run into lately.
Direct deposit through work – So many employers have started offering free direct deposit of their paychecks that employees have almost started to expect it. What’s really nice is that you can often direct a portion of that deposit to go to a different account for your savings at the same time. You can specify a percentage of your take-home pay or a flat amount. Savings contributions don’t get any easier than that.
Automatic transfer through your savings institution – The different between this type of transfer and the direct deposit is where the transfer is initiated. For instance, I make regular deposits into my savings account at ING Direct that are separate from our direct deposits from our paychecks. Sometimes, you will even find that you are able to avoid monthly account fees by having an automatic contribution in place.
Other savings – The bank that holds our checking account has a special offer that allows us to make a savings deposit every time we use our debit card. The program is called “Keep the Change” and simply rounds us each of our debit card purchases to the next dollar. The incremental amount isn’t kept by the bank, though; it’s deposited into our savings account. This is a totally painless way to siphon money into our savings.
However you use automatic savings, I urge you to find a way to sign up for it. Once you set up automatic contributions to your savings account, try to forget about it. In no time, your savings account will build up without causing you any stress. Now, don’t you wish all of your finances could be handled so easily.
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4 responses so far ↓
1 The Weakonomist // Jul 6, 2009 at 8:49 am
I completely agree. Direct deposit is the best thing. My paycheck goes into a half dozen accounts, HSA, 401k, Roth ira, checking, and 2 ING accounts. I love it!
2 Hal Merrill // Jul 6, 2009 at 12:59 pm
Thanks for your ideas, they are very helpful.. We’ve had automatic deposit for some years now, it’s required. I was skeptical at first, but I find that alone is helpful. Then automatic deposits into a savings account was really helpful. If I can keep these things happening, I might have some retirement after all.
Hal Merrill
http://www.savingmoneytipsblog.com
3 Craig @ Money Help For Christians // Jul 6, 2009 at 5:28 pm
Great Post. I have come to learn that the fewer things I need to remember the more likely it is that my plan will succeed. Automation is the solution to my business and forgetfulness.
4 Jack Chary // Jul 7, 2009 at 12:16 am
Truer words. ING Direct has a great automatic savings plan, and it’s really, really easy to set up an account. You just transfer money to your ING account from your bank account, then when you’re ready for it you transfer it back. Their interest rates aren’t as good as they used to be, but hey-nobody’s perfect!
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