You’ve likely heard that failing to pay your bills can hurt your credit and have other consequences to your financial well-being. If you’re not getting a monthly billing statement, it can be easy to forget to pay the most important bill you’ll ever have: your savings.
Consider it a bill
If I can have streaming services, subscription boxes, and my phone service provider take money from my account every month, why can’t I put money into savings each month in the same way? I like to think of contributions to savings as being the same as scheduling those payments. By viewing it as a bill, you can ensure it “gets paid” and, in doing so, build your savings over time. Nobody establishes their savings in one go.
Give it a purpose
If you don’t have a reason for setting aside money other than some abstract idea of an emergency fund, it can be challenging to find motivation. Think of some goals you might have for yourself, both short and long-term. This could be a vacation you want to take, a car you want to buy, or relocation to a place you want to live. Having an emergency fund is also important, so think of some possible risks you have based on your lifestyle. Could you need money for car repairs? A damaged phone? Reduced hours at work?
Separate and label your savings
If all of your savings are stored in one account, it can be difficult to visualize how this translates to the savings goals you set. Most financial institutions, including the Credit Union, offer sub-savings accounts where you can separate your money for different goals. You can even label these accounts with a purpose! For example, I have sub-accounts for travel, a down payment for a house, an emergency fund, and even one that’s just for fun things. By separating your savings according to your goals, you’ll be more easily able to measure success and less likely to dip into that money for something frivolous.
Make it automatic
A great way to ensure your success with saving money is to set up automatic transfers. You can choose a dollar amount or percentage of your income, no matter how small, and set your accounts up to add to your savings automatically. This can make it feel just like any other bill set up for auto pay. By making saving a priority, you ensure that it happens. Additionally, things inevitably some up that require us to dig into those savings, so making this a recurring and automatic habit ensures there is always money there when you need it.