We’ve all heard of the concept of paying yourself first, but are you actually doing it? When it comes to guaranteeing yourself to put money into savings, in what way are you following through on that promise to yourself? It’s very easy to wait to save until the end of the paycheck to see what’s left over only to discover that there isn’t anything left for yourself. Where did the money go? You bought groceries, paid bills, went out to eat, and there’s probably some money spent that you aren’t completely positive if you know where it went. Now your emergency fund isn’t growing, your retirement fund is stagnant, and your goals seem more distant than before you were paid.
Get yourself back on track by saving automatically. Here are five simple ways to get started.
- Visit your employer’s Human Resources or Payroll department to request a direct deposit form. If your employer has a Human Resources website, the form may be available to submit online. Typically, employers will allow you to divide your paycheck into both checking and savings accounts. Select an amount you would like sent directly to savings from your paycheck.
- Visit your bank or credit union to find out information about automatic bank transfers. Financial institutions encourage saving by allowing some funds to automatically transfer from your checking account to your savings account.
- Gather as much information as possible on your employer’s 401(k) or 403(b) plan. Start contributing a percentage of your paycheck for your retirement. If a matching contribution is offered from your employer, try to contribute at least the amount they match because they are giving you free money to plan for your future. It’s never too late or too early to start saving for retirement, and there may be tax benefits for contributing to your retirement fund.
- Create an automatic deposit into your Traditional IRA, Roth IRA, or other investment account. This is especially important if you do not have access to saving for retirement through an employer sponsored plan. You can set a specific dollar amount or percentage of your paycheck to be invested every payday or every month.
- If saving for your child’s college education is one of your goals, consider automatic recurring contributions into a MOST 529 account. Research the options within the 529 plan, and consider tax benefits for contributing.
For more information, consider joining Prosperity Connection for the Saving for College & Making the Most of Your MOST presentation on April 26th, the Building Wealth & Automatic Savings presentation on April 27th, or any of our ongoing events throughout the year. To get started with an action plan specific to your needs, make an appointment with a Financial Coach.
“An investment in knowledge pays the best interest.” –Benjamin Franklin
By Meghan Northcutt, AFC® Candidate, FFC™ Candidate