Yesterday we talked about saving with a plan, and today we’re going to talk about how to automate your saving. Automating our savings is the single most important thing that we did to become financially successful and ultimately, financially independent. It’s powerful stuff!
There is no doubt that automatic savings work, but sometimes finding the right automatic savings method can be hard. See if any of these ideas work for you:
Skim Off The Top
Look at the usual amount of your paychecks, and round down to the nearest $100 (or $10, or $500, or whatever works for you.) Base your budget on that rounded number, and every payday, move the overage into that savings account. With two military paychecks a month, that money can build up fast!
This works especially well in situations where your paycheck is varying a lot each month, like living overseas where certain allowances are based on the local currency, or when you’re moving in and out of Combat Zone Tax Exempt (CZTE) areas.
Allotments are great savings tools because you never even see the money. We have an allotment taking straight from my husband’s paycheck to a bank account at a not-our-usual-bank. This allotment builds up and pays our kids’ college expenses.
There are a lot of tools, including apps and services offered by your bank, to help you round up the amount of each purchase and put the difference into a separate savings account.
I don’t use these, because that would make me batty, but a lot of people love them!
Make Your Employer Work For You
Take advantage of employer-sponsored retirement plans, like the Thrift Savings Plan, to put money into tax-advantaged retirement accounts before it ever hits your pocket. This is possibly the easiest way to automate your saving because you never even see the money.
Stash Your Cash Back
There are a bjillion ways to earn cashback, either through rewards credit cards or rewards shopping sites. Divert those rewards to your savings instead of adding them to your spending accounts.
Use Extra Money
Make a pledge to yourself that any “extra” money will go into savings. This might be a birthday check from your mom, a refund from overpaying your income taxes, or that $10 you made in Facebook marketplace.
Schedule It Automatically
Set up automatic transfers from your spending account to your savings account. Try to set it up on or close to payday, so that you will definitely have the money to be transferred.
Get Yourself a Side Hustle
Picking up a second job is a great way to build savings. It can be hard to find jobs that fit your lifestyle and schedule, but put out the word that you’re looking. I’ve worked in the nursery at church (I brought my kids), coordinated after-school programs at the elementary school, and filled in on Saturday nights at a friend’s restaurant. If you have more time or flexibility, there is always something.
You may also find some ideas in 60 Ways To Make 50 Dollars.
Cut Back, Forever or Temporarily
Look at your monthly spending plan and figure out where you can cut back. Can you take 10% off your grocery budget, your entertainment budget, or your travel budget? Alternately, is there a category you could give up entirely for a month, or a year?
Look critically at every monthly expenses, and see where you could save on those regular expenses. One big area where many people are overpaying is cell phone bills. Did you know I pay $120 a month for six lines of unlimited cell phone service? Check your internet bill, your insurance (making sure you keep enough coverage,) your garbage pickup, and whatever else you pay each month. Call each company and ask how you can lower your bill.
The best thing about saving automatically is that even little amounts add up over time. And if you can pull little amounts from a bunch of different sources, your savings can grow even faster!
Let me help you keep up-to-date on your military pay and benefits! Subscribe now for my newsy emails, which come about once every two weeks.