Chris O'Shea
Automating your savings is not only smart, it’s a great way to provide a financial safety net and build wealth. Here are some ways to automate your savings so that you’re in the best possible position financially.
Split it Up
One way to automate your savings is to take advantage of something called a “split deposit.” As the name suggests, this means:
- When you are paid via direct deposit, your check is split into two.
- One part of your check goes into your checking account.
- The other part goes into your savings account.
This is the old “set it and forget it” method. When you are automatically saving, you don’t have to worry about manually doing it during the month.
Auto Transfers
Another way to automate your savings is to set up auto transfers from your checking account into your savings account. This is the same as a split check; you would usually only use this method if your employer doesn’t offer the split check option. Here’s how to do it:
- Log in to your bank or credit union’s online or mobile banking site.
- Set a date to transfer funds.
- Specify the amount to transfer.
Bingo, your money will automatically transfer from your checking to your savings each month.
Use Your 401(k)
If your company offers a 401(k), make sure you are using it. That means asking your employer to withhold a certain amount of pre-tax money to be deposited into your 401(k) plan every month.
Do One Thing: Set up either a split check or an auto transfer so that you never have to worry about saving enough each month.
Jean Chatzky
