Save Money Automatically

We all know that saving money can be one of the hardest things to do, that is why this article is one of the most important lessons on this website, we all have a little bit of trouble when it comes to avoid overspending, most of the time we become our own victims because having money right there at our disposal makes it easy for us to fall for the tempation of spending every last penny that we have, even if we know that it is not right and that we can’t spend that money because we might need it for stuff that is really important, like paying off debt. Truth is that human nature is complex and almost impossible to control, so we must find a way to avoid overspending, or simply avoid spending money in things that are not important or necessary for us.

This is a very important post because I will teach you how to do just that. Let’s say that maybe we want to put some money away for college, a new car, or even retirement, so we start saving and the money is right there where we can easily take it and spend it, so when something comes up we do exactly what we were not supposed to do, spend it. We think to ourselves there’s no problem, “I will just take a small portion of my saved money and I will put it right back as soon as I can”, but what happens is that we don’t put the money back and we just keep coming back for more until our plans become a part of the past, so you forget about your goals and about what you really wanted, and you start thinking that what you dreamed for is not as important as you thought it was, when it really is important, because being happy, reaching your goals, your objectives and living life the way we want to is part of good financial planning.

What we want to do to have success in our money saving campaign is place our money where we can’t touch it, and if all the management of our savings account can be done without us being a part of it, then things will be a lot easier as we are less likely to fall into the tempation of spending it. Saving money automatically has been discussed in many books, guides, and websites that talk about personal finance. In this article you will learn the most effective way on how to do it.

How to Save Money Automatically

You need to create two savings accounts, I believe that you must have one saving account by now, if you don’t then you should probably want to get one to make this work. The account that you already have won’t be for saving, it will be for spending. You will use this one to pay for bills, groceries, clothes, going out, and for any other need that you might have.

The second savings account that you are going to open is to really save money, you will put in this account the money that you are going to use in the future for retirement, a new car, education, vacations, etc. This is the account that you are going to use to set up an automatic savings plan.

There are two ways to approach automatic money saving, you can do it directly through your brick and mortar bank or you can do it through an online bank. Anyway you choose it will work, all you have to do is simply set the percentage that you want to save everytime you make a deposit in your spending account. For example if you got paid today, you deposit your money in your spending account, the percentage that you set to save will be automatically taken out from that account and it will be automatically sent or placed in your real savings account. You won’t have to worry about saving money again in your life because it will happen even without thinking about it. The money that you save should be placed in a high interest savings account, this way your money will grow exponentially as you save it.

How to Split up the Money in Different Accounts

This one is easy, all you have to do is go to the HR department and pick up a direct deposit enrollment form. Direct deposits can be split up between several savings accounts, after knowing how much you want to save and how much you need to spend, decide what percentage are you going to place in your savings account and what percentage you are going to leave in your spending account. The money that is saved shall be deposited directly in a high yield online savings or money market account.

The Process

Open a special high interest savings account. As you must know by now online banks usually offer their customers higher savings rates than almost any other brick and mortar traditional bank, because they don’t have expensive teller interactions and expensive paper handling they are able to offer their clients better deals and opportunities. You should check out my article about online banking so you understand the true benefits of using one of these financial entities.

If you are interested then you should set up an online savings account right now. There are several online banks that you could use, in the next article I will review the best online banks, but right now I will give you a quick introduction of my personal favorites:

• ING Direct : You can use it as a savings account and as a checking account, you can also have access to your money at any time in case that you need it for something, you also get some great benefits as free online bill payments, free debit card for purchases, and you can withdraw up to $35.000 from ATM’s.

• HSBC Direct : You can get a special CD for saving that pays a 2.5% interest rate. You can make up to 5 times the national average.

• Money Aisle : They will automatically analyze and compare the online savings accounts rates from almost all the other banks that are online, and they will choose the highest interest savings account rate for your own account. You can make up to 10 times the national average.

Conlusion

After reading this article saving money should no longer be a problem, what you have to do is get started right now, this way you will strengthen your financial plan. You won’t have to worry anymore about saving because you won’t have to think about it, it will just happen automatically. Saving money is something that you have to do, so to avoid falling for the tempation of spending your saved money, simply do it automatically.