I get paid once a month. A few days later my checking automatically transfers various amounts of money into various savings account. And so - I end up paying myself first, by treating my savings as another bill. The payments into my savings are automatic and happen at the beginning of each month. I find that if I try to wait and see how much I've saved by the end of the month I spend a great deal more money and save a lot less.
I'm a big believer in paying yourself first. Once you start to view your savings as a bill it becomes a habit. And even though every once in a while I have to dip into that savings to get through a particularly tight month, I still end up saving more than if I wait until the end of the month.
How do you go about saving?
Oh, and I'm happy to say all my transfers went through as planned. =)
9 comments:
I am paid twice a month and I generally put about 10% in one savings account and another 1% in another savings account. And yep, I do this before I pay any bills.
I'm paid bi weekly. My 401k and Roth are automatic, and so is some of my cash savings. But I always end up doing some manual transfers on my cash savings.
My rent even is automated -- half each paycheck into a money market w/check writing. That is my favorite thing about my setup.
We are following Dave Ramsey's baby steps and have $1,000 (mini emergency fund) in our savings account), and since we are done with that step we are currently working on step 2 (paying off all debt except the mortgage). Since we are on step 2 we put all our extra money each month towards debt, and none in savings, until we are debt free. Then we will begin step 3 (saving three to six months emergency fund, with our goal being $30,000).
I put money into ING on the 15th of every month automatically. (Well, except for April, as this is an exceptionally expensive month).
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My retirement is paid automatically twice a month. We then pay our savings account in the middle of the month. We do treat it as a bill as well and will always contribute each month. However, I like the idea of paying at the first of each month. No reason not to pay when the end of the month comes.
SP - I love that your rent is automated too!
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I pay myself first too, both through a 401k, automatic investing and my savings are a line in the budget like any other bill. I get so excited when I make those transfers, but I rarely check up on them. I've never had a problem with one going through.
I do a very similar thing that you do. I am paid bi-weekly and have my savings automatical debit out of my account and into others each pay period. I also have some that come out every week (though I'm slightly nerotic when it comes to my savings.
I agree that you should look at your savings as a bill, and pay yourself first.
http://jessiesmoney.blogspot.com/
Automatic! I get paid bi-weekly and my 401k is taken out right away and I have various transfers set up for the same day for all my savings, including my Roth IRA. :)
I move 1/2 of my rent into an online savings account each paycheck and it automatically gets sent as a check so that I never even have to think about it.
Yay for savings!
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