Do you find yourself paying off all your bills each month, but not having enough left over to put into your savings? We’re sure you’ve been told several times that allocating a portion of your paycheck into a savings account is very important but why is it so hard to do? The answer to your troubles may be as simple as making saving automatic.
Saving just a little extra each month can be a powerful habit that expands your lifestyle possibilities. In this article, we’re going to introduce a system you can use to aid in your saving that takes 15 minutes to set up and can have a lasting impact on your future and current wealth. Before you stop reading because automation sounds overwhelming, remember that this saving mechanism was designed to reduce stress, not create it.
The goal here is to save you enough money to reach your account balance goals. For example, think about saving for retirement. You should have a monetary goal for retirement based on your retirement needs. Using this information, you can calculate your monthly savings goal. This can be done for each savings objective as well, not just retirement. Let’s call each objective you have a “pile”. These piles are categorized based upon when you need the money. For example, you might have a wedding pile, a mortgage pile, a retirement pile and so on. Some piles are considered more long-term than others, like the retirement pile. Once you have calculated what you need to save for each pile, you can proceed to automating.
To start automating, choose the checking account that your paycheck is deposited into. Think of this checking account as your initial pile. The goal is to set up automatic transfers out of your initial pile into your other piles, thus contributing a small chunk of your paycheck towards reaching your savings target for each pile. To set up the automatic transfers, you can either search the internet for “automatic transfers” plus the name of your bank or call your bank’s support number. Many banks are happy to help you set this up! You can call the following popular banks at these numbers:
- Wells Fargo: 1-800-956-4442
- Seacoast Bank: 1-800-706-9991
- TD Bank: 1-888-751-9000
The takeaway is: pay yourself before your bills! Of course, paying bills is necessary, but if you don’t pay yourself first, you will most likely end up spending this money. By automating your transfers into your various savings piles, you can save 20-30% of your income with no effort on your part. Once your saving system is set up, your checking account holds your spending budget, which can be used on restaurants, entertainment, and other fun categories. Try it for a while, you’ll be surprised by the amount you save if you stick with this system long enough.
At Fogel Capital Management, once our clients can successfully put their money into these systems and save, we can grow their hard-earned and saved money through a long-term investment approach. We tailor your investments to you, making sure you hit your goals. For a free consultation and portfolio review, please call 772-223-9686.