I am excited to be a contributor in The Budget Mama’s 21 Days to a Better Budget series.
Yesterday I shared Why You Should Automate Your Savings Plan.
It seems bold to say that making savings automatic can save you thousands of dollars, but it most definitely can. Here is my experience from two loans we paid off.
We had a student loan with a monthly payment of approximately $85. This was withdrawn automatically from our checking account every month. We decided to pay off the student loan with a portion of our savings and had every intention to put the monthly $85 into a savings account for our daughters’ schooling. We paid off the loan…and did nothing else.
That was 3 years ago. Because we didn’t immediately set up an account for saving the $85 we ended up spending the money each month. We missed out on over $3,000 in our daughters’ education savings accounts! By skipping the simple step of making it automatic, we ended up spending the $85 each month instead of saving it.
A year ago, we paid off a second student loan. We didn’t make the same mistake again. We paid off the loan and immediately set up a monthly recurring transfer to the Education Savings account we set up. Within a year, we now have an additional $1,380 in the account because we set up the automatic payment.
The Capital One 360 account currently offers a $25 Bonus on new accounts.
Make the decision to save, but then go the next step and make it automatic. If the payment is not automatic, it’s much easier to think: This month is tight, I will save next month.
Read the rest of the post here!
Check out the Automatic Savings Resource Page for a free Automatic Savings Worksheet.
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Monica says
Very good advice! I’m a big fan of automatic transfers into savings. We’re at a point, though, where I am on maternity leave, and we just moved to a new city. So we’re paying rent AND still paying a mortgage until our old place sells. It’s a very stressful time for us, financially. I did, however, make sure that I made a big contribution to my new son’s education fund. My point is, we are not in a position to be saving a lot of money right now, but before this point we were and we DID. And that will carry us through until our old house sells and we can start putting large amounts of money into savings again. I’m living proof that if you set money aside while you can, it will help you immensely in the long run.
Emily says
Thank you for sharing, Monica. It must be stressful to be paying rent and a mortgage at the same time. Great job putting the money aside! It’s great that you made saving a priority when you did.
Ann says
I’m such a fan of automatic payments. Although it can be a hassle to get it set up, once it’s done, it’s done. I still have a few areas where this needs to happen, but this is so encouraging. Thank you for sharing!! #SHINEbloghop
Emily says
Yes, the hassle is worth it! Thanks for stopping by. :)
Kirsten Toyne says
This is something we do and it is great because the money goes without us having to think about it. Great advice.
Emily says
Yes, one less decision to make. :)
Thanks for stopping by.
Louisa Vickers says
I love this advice. I have an automatic transfer from the account I get paid into to a savings account on payday, and it’s really neat to see that money grow! I think I’ll have to think a bit harder about my budget, and try out some of your tips!
Emily says
It’s very rewarding to see the money grow! It makes it so worth it.
Keri Snyder says
Such a great post! Love the tips here! We just found out my husbands raise is more than expected so this was great for me to read to remind us to be diligent!
Emily says
Good news! It’s always fun when that happens! I am happy the post was a good reminder. Don’t forget to splurge at least a little though. ;)
Lori says
Automatic savings takes the negotiation out of saving and pays off in big dividends as we watch our money grow. It’s a win/win method. Thanks for sharing your story.
Emily says
Great point! It’s helpful to not have to make the decisions each month or pay period when the transfer is set up for you. No negotiations!
JES says
Great advice! Thank you for sharing this on the Art of Home-Making Mondays! :)
Sharon Rowe says
Thanks for sharing on Monday Madness last week. Pop over when this weeks Monday Madness opens to see this article as a feature!
Emily says
Awesome. Thank so much for featuring the post, Sharon!!