Tips to Make Savings Automatic

Tips to Make Savings Automatic

How to automate savings.

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 you’re in the best possible financial position. 

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 in two. One part of your check goes into your checking account and 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 into your savings accounts. You can use this method if your employer doesn’t offer the split check option. Just log onto your bank or credit union’s site and set a date and amount that would automatically be transferred from your checking to your savings each month. Done.

Max 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.

Note: If your employer matches 401(k) contributions, aim to contribute enough to get the entire match.

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.

Chris O'Shea

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