Put Your Financial Success on Autopilot
Putting a little money away for a rainy day isn’t always easy. You have good intentions, but at the end of the day, there just isn’t any money left before you make it to the next paycheck. A strategy that makes this process easier is to place your saving habits on autopilot.
The “B” word
Start by making a personal budget. Take a look at what you bring in each month. Next, write down your fixed expenses. These are things like rent, car payments, utilities, etc. Figure out how much you need each month for groceries and other essentials. This is your bare bones budget. It’s good to know what you need to get by each month. Next, it’s time for a little bit of math. Start with what you bring in each month and subtract all your core expenses. The amount remaining is your discretionary income. This will pay for entertainment, clothes, getting your nails done, etc. Going forward, part of that income will go into a savings account.
Save What You Can
Pick a number you’re comfortable with. Maybe that’s just $20 per month, maybe it is $500. Put it in your budget and treat it like any other bill. It won’t take you long to get into the habit of setting aside that money for savings. To make it even more hands-off, consider setting up a separate savings account. Then have the savings automatically transferred to the new account as soon as you receive your paycheck. If you don’t see it, you’ll never miss it, and your savings will run on autopilot.
Keep an Eye on Things
Lastly, don’t forget to audit your savings from time to time while taking another look at your budget. Can you increase your savings a little more? Another great way to boost that savings account is to take any extra money – things like birthday cash, tax refunds, or bonuses – and put them straight into the savings account. Again, you won’t even miss the money, but it will help you build up your savings quickly. Make sure your savings are sitting in an interest bearing account. Since you won’t be touching this money unless it’s a dire emergency, you should be able to earn at least a little interest. Talk to a banking specialist about your best options and start putting your savings on autopilot.