If you are like most families, you spend your paycheck as soon as it is deposited to pay bills and to attend to a needed list of items. You know you need to save more. Yet, you probably put off saving money until after it is already spent. The challenge to spending in this fashion is that at the end of the payroll cycle, or at the end of the month, there isn’t anything left to save. To combat this all too common problem, set yourself up on an automatic savings program.
Two solutions exist for helping you establish an automatic savings program:
- Employer Sponsored Retirement Plans– If you have an employer sponsored plan available, consider starting here. Before you begin, be sure to find out if they offer a match on your contributions. This is free money; if you save 1% of your salary, they may match 1%, helping you accumulate savings quicker than you could do on your own. Begin by saving an amount that is comfortable out of each paycheck. The amount you select doesn’t have to be significant, remember; you are just trying to get something started.
- Automatic Transfers– If you don’t have an employer plan available, consider setting up an automatic transfer through your financial institution. You can choose an amount to transfer into a savings account the same day that you get paid.
Over time, you won’t even feel the money leaving your paycheck, and these small transfers into either program can add up to big savings!