So you enjoy a savings account. Oh, really? A lot of people have saving accounts but find it hard to deposit into it. This is a very common problem and you may be experiencing it. When your paycheck arrives, it is usually deposited automatically to your checking account to pay the never ending stream of bills and expenses.
But before you go rushing to your bank to close your savings account, consider first putting it to good use. Here’s how to save more money using your savings account. The scheme is you talk to your employer and ask if they can deposit a part of your paycheck to your savings account as well. And that’s it.
It doesn’t really matter how much is deposited, just keep this scheme going to ensure that your money is saved before it’s spent. It’s that simple but why is it very effective?
When you receive your income, you will most probably do some budgeting and allocate the money to bills, rent or mortgage, groceries and other necessities and expenses. Left over money, if there is, is what usually end up as savings.
The problem is, for most of the times, nothing is left to be added to your savings. There is almost never any money left. If there is, left over money still has to survive your temptations of spending them. If you have excess money and it’s easily accessible, your tendency is use it to buy the first beautiful dress you see, or the latest electronic upgrade for your computer and other fancy materials that may catch your attention.
Automatic and regular deposits of your income to your savings account mean you don’t have to think about it and you don’t have to rely on what’s left. The money is already saved before you have to think about expenses and before you can spend it on other things.
You don’t get to hold the money and be tempted to spend it for comfort goods. Automatic savings is very easy to do, thanks to modern day technology and automated systems. Although some employers don’t allow this splitting, most banks can make a direct link between your savings and checking accounts.
Instruct your bank to establish an automated transfer between the two accounts on a regular basis. Say your paycheck arrives every Monday, you can set an automatic transfer for a fixed amount of money to coincide with this day. How much you save matters only if you are planning on a goal.
But if you are saving just for keeps, even $20 every payday is so much better than nothing. However, it is highly suggested that you allot at least 5% of your total income to go to your savings. What matters, as has been repeated, is that you keep this going for as long you can, for as long as possible.
Couple your savings with the bank’s interest rate and you are definitely going to have a wealthy sum you can use for the future or whenever needed.
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