Our 5 Steps To Quit Your Job To Purse Your Dreams was a huge hit. In addition to that, it seems the 12-18 months of savings was a conversation starter for many of you. This is one of the most important parts of pursuing your dreams. Having this safety net is what is going to help you when tough times hit your business. Here are some simple ways to automate your personal savings so you can ensure you are creating an emergency fund for your leap to the entrepreneurial realm.
Monthly Transfer
Most major banks allow you to transfer a set amount of money out of your account on a schedule. Twice a month a small figure is taken from my personal checking account and deposited into my savings account. This has been happening for the last two years. The amount is not a huge amount where I would freak out and notice it was gone. I suggest to my clients to start with $25 every two weeks. Then after six months bump it up some.
Online Savings Account
Open an online high interest rate savings account. This will accelerate the savings by some. Most traditional banks have such a low-interest rate you barely earn anything. Many online banks have interest rates at .50% or more. More and more Americans are switching from traditional banks to online banks. They don’t want to pay the fees that occur with local banks. In college, I opened an account with ING Direct. $25 went from my account every month. Never noticed it. This is a great way to combine the first two steps.
Swipe To Save
One of my first banking accounts had a program that they rounded up your purchases and the difference (change) went into your savings account. To note this program was elective options for customers. This is a really good option if you tend to swipe your debt card often. Personally, since getting on the Dave Ramsey Baby Steps program I have limited my swipes so this would not be great for me. Also, if you do not balance your checkbook this would not be for you.
Let’s use an example to help you understand the importance of automate savings. Say you want to save $5,000 for your company. If you set up automatic savings to transfer $100 to your online savings account every Monday for the next 52 weeks you will have $5,200 not including the interest you would earn on it. What really matters is that YOU DON’T TOUCH IT!! To some that might seem like a long time to “earn” $5,200 but most people don’t have that in their savings right now anyways. You can always accelerate that by doubling it.
It is important to save regardless of what you are trying to achieve. Remember the US has gone through several recessions and there were people who were not effected by these hard times. They had savings and investments to protect them. People joke about the one percent all the time but they are fiscally covered if disaster strikes them. Will you be?
Can you implement one of these three today to help you automate your personal savings? What are you doing right now to help you save for your future?
Photo by Keren Levand on Unsplash
