Do you want to know the easiest way to save money? Make it automatic, and you’ll be saving without having to remember to take action. This well-known strategy is called paying yourself first. If you don’t see the money in your wallet or your checking account, you will be less tempted to spend it.To get started, choose an amount and how often it will transfer. After that, it will continue all by itself! There are several ways to automate savings.
Direct deposit or
Many employers will allow you to split your direct deposit into more than one account. Choose an amount to send to your savings account, then have the remainder of your paycheck go to your checking account as usual.
Automatic account transfers
If direct deposit is not an option, you could set up an automatic transfer through your bank or credit union. Your financial institution should be able to set up a recurring transfer from your checking to your savings account.
Some savings and investment accounts can be tied to your debit card to help you save your change. Every time you make a purchase, it will “round up” the total to the nearest dollar and deposit the difference into a separate account.
Tax time savings
When filing your tax return, consider sending any tax refund you receive directly to your savings account. This decision may take away the temptation to spend it, so you will have it if you need it later.
You may have the option to participate in a 401(k) or other retirement plan through your work. Contributions to these plans often take advantage of tax savings by directly coming out of your paycheck. Some may offer an employer match. This is yet another way to pay yourself first.