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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@ KT: If your bank does not offer auto transfers then you might want to start looking at adding another bank to your financial belt. ING is an excellent bank and you can use it simply for the savings. You can set up the auto transfer from inside ING so even if your bank does not offer that feature you can get it from ING.
It is wise to have at least two separate banks (in these times) in case of emergencies. So I advise you to go ahead and set up that (ING) account and start saving….even $2 a month helps. I was working for minimum wage and was dead broke when I started and could only send $2 in savings to ING every month. I went ahead and did it and faithfully had ING pull $2 into a savings account until my situation improved and I could send $5….then $10. The key is to start and be consistent…no one has to know that you are only saving $2.
Yes! These are all wonderful ideas! My husband’s employer allows us to direct deposit into a maximum of 4 different accounts, so we automatically deposit a certain amount into savings each pay period. We don’t miss the money from our budget and tend to even forget about the savings being there for emergencies. We also made sure that we had enough going into checking for our budget plus a little extra and to pay extra on our current debt (we do have one credit card with a balance and have been doubling the “minimum monthly payment”).
We also have 2 savings accounts at other banks that we make larger lump deposits into once per year. I know that’s really weird but we really have to go through a process to get money (the banks are over an hour away and we never keep the passbooks with us), therefore making us really think through the purchase, etc. before getting the money.
I really like Wachovia’s way2save program. Similar to the “keep the change” plan, also if you overdraft on checking way2save will cover the overdraft automatically, and without charge.
i haven’t started doing automatic savings. I think the reason is that i still havent found my feet and i am directing most of my funds towards other areas that will in the end benefit my financial situation. Also the bank that i use doesn’t have this feature so i may have to move to another one and this could be hectic