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  • Putting America Saves Week Into Action– Step 3: Save Automatically

    ASWGraphicIt’s day three of America Saves Week. The strategy for today is “Save Automatically,” which is also an overall theme of America Saves Week. Saving automatically is also one of WISER’s favorite pieces of savings advice. It must be pretty important then, right?

     

    There are some great benefits to saving automatically. Most of us think about saving as an afterthought. We get our paychecks and then allocate the money for our bills, rent, groceries, and other every day expenses. Only then do we think about saving what is left, which often isn’t much. By setting up a method to save automatically, you put saving first! You don’t have to think about it or take any extra steps each month to save, and before you know it, you will have built up your savings account or retirement funds. If you save $50 a month ($25 from each bi-weekly paycheck), by the end of the year you will have you save $600 . After five years, you’ll have $3,000 PLUS compound interest. Check out WISER’s Basics of Saving and Investing to learn more about what you can do with the money you save.

    stack of coins greenSaving automatically is my favorite step so far. Why? Because it’s easy! Digital technology makes saving simple. My bank, like many others, allows me to set up automatic transfers between my checking and savings accounts. I set up an automatic, recurring transfer between my checking and savings accounts every two weeks (each time I get a paycheck). By doing this, I won’t even feel like I am missing money because it will be in my savings account before I can even think of spending it.

    An alternative way to start saving is through your employer. Many businesses allow you to split your paychecks between two accounts. You can ask your employer to deduct a certain amount and transfer it to a retirement or savings account automatically. Mentally this may be a better option for some because then you do not even see the money “disappearing” from your checking account. It goes right into your savings before you even get your paycheck.

    My bank also offers a “save the change” option. At the end of each day, the bank rounds my purchases up to the nearest dollar and transfers the difference to my savings account. I enrolled in this today! While the coin jar I set up on Monday would be helpful, I know that I use my debit card more than cash. Since this option is basically the same idea, I thought it would be an even better way to boost my savings account. My coin jar may feel neglected, but my savings account will still feel the love!

    Do any of you have other ways to save automatically? Let us know!

     

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    WISER

    About Us

    WISER is a nonprofit organization that works to help women, educators and policymakers understand the important issues surrounding women's retirement income. WISER creates a variety of consumer publications including fact sheets, booklets and a quarterly newsletter that explain in easy-to-understand language the complex issues surrounding Social Security, divorce, pay equity, pensions, savings and investments, banking, home-ownership, long-term care and disability insurance.

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