It can be easy to save money | Voice
Finding money in our budget to set aside for savings can be difficult. Many times it may seem like we have too many months at the end of our money, and setting aside funds for a rainy day doesn’t seem possible. Saving money is possible, and can be done very easily. The answer? Save automatically.
The easiest and most effective way to save money is automatically. Automatic savings is how millions of employees save through their 401(k) or other workplace retirement plans. Funds are transferred to the retirement account before the paycheck is issued. The money never arrives in our bank account and over time we are less likely to miss it.
We can use this same concept – a “set it and forget it” – to deposit funds directly into a savings account to help us achieve our goals. Whether it’s building an emergency fund, saving for a home, paying for college, or going on vacation, automatic savings can help us get there!
Automatic saving simply means that we have a process in place to save at regular intervals, whether monthly, weekly or daily. There are many ways to autosave. The following methods are the most common:
Divide to save
If you’re currently working, ask your employer to take a certain amount of money out of your paycheck each pay period and transfer it to a retirement or savings account (or both). Traditionally, you can set this up using direct deposit from your employer. Check with your company’s human resources department to find out if the “split to save” option is available.
Work with your bank or credit union to set up an automatic transfer. Each payday, transfer a set amount of money to a savings or investment account to help you reach your savings goals.
Choose a day of the month or a regular interval, such as every two weeks, for your bank or credit union to transfer a fixed amount from your checking account to a savings account. This method is extremely useful for people whose salary varies from week to week. Consider choosing a time of the month when many other automatic payments aren’t happening to make it easier on your budget.
If you are unable to set up an automatic savings plan because you are paid by physical check, cash, or are not currently using a bank, you can still save a consistent habit! Consider putting some money in an envelope each pay period or keeping loose change in a jar each day. There’s no harm in watching your automatic savings add up – literally!
If you’re still at the stage of your savings journey where you’re reducing your debt, start saving, even if it’s a small amount. Start small and think big.
Automatic savings works no matter how much money you choose to put aside or which method you choose to use. If your budget is tight, start small. If you’re saving for a major purchase, save as much as you can based on your current needs. Setting up an automatic savings plan can be one of the easiest and most effective ways to get started with a new savings habit. Putting money aside consistently – even in small amounts – will accumulate over time.
Source: America Saves.
For more information on family resource management or adult development and aging, contact the offices of the Marais des Cygnes Extension District Paola (913-294-4306) or Mound City (913-795-2829), or write at [email protected] or check our website: www.maraisdescygnes.k-state.edu.