NDSU Extension Service - Ramsey County

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Automatically Saving

Automatically Saving

Do you have a savings account, yet find it difficult to find money to deposit into it?  Even with the best of intentions, savings dollars vs. spending them, often takes a back seat.  Generally when you receive income it is either directly deposited into your checking account or you go to the bank to make a deposit. Typically these funds head straight to the checking account so they are available to pay the seemingly endless stream of bills.

Most people save money as an afterthought. When they receive income the money is allocated to bills, groceries, rent or a mortgage or daily expenses among other things. The only time adding money to savings is when there is money left over – which usually doesn’t happen.

One financial management tool you can use to keep your savings growing is an automatic savings plan.  An automatic savings plan allows you to have money automatically moved to savings according to a set schedule. The outcome is that no effort is required to move the money to savings each month; it will be moved automatically for you once it is set up.  When deposits are made into a savings account automatically and regularly you don’t have to think about it and the money is deposited before you have time to worry about expenses or how much money will be left over.

If you currently have direct deposit through your employer you will find the easiest way to establish this is to have part of your paycheck directly deposited into your savings account as well. It doesn’t matter if it is $10 or $500, simply having this happen automatically will ensure money is saved every time you are paid.

If you don’t have direct deposit of a paycheck, there is another easy option available.  At your request, your financial institution can link checking and saving accounts and establish automated transfers between accounts at a regular interval that you select.  You can make this request in person or check out your financial institution’s website by looking for a recurring transfer or automatic savings plan option. Input the date of the first transfer, the amount of the transfer, and the frequency of future transfers and you are ready to go.

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