Ready to set up automatic deposits to a savings account? Here’s how to get started. “I didn’t look at the balance until a year later, and it had already amounted to several thousand dollars.” Seeing your money grow without actually having to do anything-without, as Lockert says, “feeling the pain of saving"-can be really beneficial. “When I was in my early 20s and working my first full-time job, I just started saving a hundred bucks a week,” Lockert says of her first use of automatic transfers. One of Lockert’s key strategies, she says, was committing to saving-even when she was pulling in very little income and trying to pay off debt. She successfully paid off more than $80,000 total in student loan debt, the bulk of it in less than five years. And that helps you stick to the actual goal,” says Lockert.įrom her own experience, Lockert knows how effective an automatic savings plan can be. “Saving automatically can get rid of the excuses, the mental tension and the legwork we have to do in order to save. “We tell ourselves we can’t afford to save, or ‘I’ll do it later.’ We self-sabotage.”Īn automatic savings plan is a type of personal savings system where you automatically transfer a specified amount into your savings account at a particular time, a time that you can select.Īutomatic transfers make achieving our savings goals easier by reducing the amount of self-discipline involved in the process. “Our minds are really good at making excuses when it comes to saving,” says Melanie Lockert, founder of Dear Debt and a financial writer and author based in Los Angeles. Automatic transfers, on the other hand, remove a weak point from the process: you. ![]() ![]() After all, if you’re manually transferring money into a savings account, you might find a new reason each month to skip that transfer. ![]() That’s why creating an automatic savings plan-where your money is transferred directly to a savings account on a set schedule-can be a powerful tool to help you put away money. Nest eggs are all-too-easily whittled away by bills, debts, unexpected expenses and unplanned indulgences. (A lot easier.) Especially in tough economic times, many people face competing demands on their funds. Anyone who has ever tried to pinch a penny knows that saving money is easier said than done.
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