Automating my savings

Document created by ivanhoeh on Nov 11, 2015Last modified by ivanhoeh on Dec 5, 2016
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I've found that one of the best ways to save money is to open an online savings account and then set up a recurring transfer from your checking account. In the past I always had a savings account, however it was through the same bank as my checking account. Bad idea. Having your checking and savings so closely connected allows you to easily transfer money back and forth any time you feel like it. That's what you DON'T want, if you're serious about saving money. Instead, it's best to create a savings account through a different bank - preferably an online bank (greater interest rates). Saving your money with a different bank will force you to save better because your money won't be so easily accessible. You'll have to wait a few business days to get your money transferred from your savings to your checking. That's a hassle - so chances are, you won't be dipping into your savings often. Once you have an account with the online bank go ahead and set up a recurring transfer from your checking to your savings. This way, you don't even have to think about it - you'll be saving with absolutely no effort at all. I set up a biweekly transfer of $25 with my bank - it's not much but in a year's time, that's $600 + I will have saved. And don't forget, you'll be acruing interest on your money as well! Awesome right?