It is America Saves Week, and despite common opinion, this is not an oxymoron. Americans can and do save. In fact, we have a complex, advanced financial system that allows most of those who participate in it the opportunity to program savings directly into our budgets. The American Dream is indeed alive and well. Younger generations just need to be savvy to see that dream come to fruition. Whether you are saving for a great outfit, a shopping spree, your college education, your first apartment, or even a home of your own, make sure you are making your money work for you...automatically! Being educated about the resources at your disposal is crucial, and taking advantage of those resources is equally as important. This sounds like a daunting call to action, but fear not! Here are a few easy ways to save time and money by making smart decisions and getting your money to do the work for you.
1. Start by Choosing a Bank
If you are not yet old enough to open your own account, enlist the help of your parent or guardian. You will want to look for a financial institution with a few criteria:
- Your financial institution should offer interest on the money you hold in your accounts.
- Make sure they are tech savvy enough to offer online billpay, as well as electronic transfers between accounts.
- They should have great customer service. Remember that the least expensive option is not always the best value. If you call your bank and wait twelve minutes only to get a grumpy, disinterested employee on the phone, you might want to reconsider your choice.
2. Take Advantage of Employee Benefits
- If your employer makes it available, have your checks direct deposited into your account. This way you won’t have go into a branch each week, and you can designate a portion of your earnings to go directly into your savings account.
- If your employer has a retirement plan available, be sure to take advantage of this. It might seem silly, but you are not too young to start saving for retirement. The most powerful tool you have in your retirement toolkit is time.
- If your employer will match your contribution to your retirement plan, don’t leave any money on the table. This is part of your total compensation package. If they match up to 5% and you are only contributing 2%, you have given your employer back 3% of your total compensation. As generous as that is, you’re the one that worked hard for that money, keep it!
- Set up online bill payments for your cell phone bill, car payment, or any other bills you can automate. This way you will make sure you have an excellent payment history and you won’t have to remember to make those payments each month. Be sure to check these statements once a month to make sure there are no unauthorized or unusual charges that you may need to contact the service provider about.
3. Set Up Electronic Transfers
Electronic transfers between accounts are awesome! This is one tip that I just recently started taking advantage of and wish I had thought of sooner. Set up a savings account and link it to your checking. Have a set amount transferred into your savings each week. Don’t even think about this savings account. You will shock yourself with how quickly you start accruing money. Because you chose a bank that pays you interest, your money is making you more money by just sitting there. It’s like magic, but cooler because it’s real. Check out an earlier post, Why Interest Rocks for more info on how interest works. If you want to get really fancy, you can look into other options like CD’s, Mutual Funds, and other ways to make money off your existing money. That is a blog post for another day.
Here is how this process works for me:
Automating your money can save you time and make you money. Just know that you are the master of your financial future and making the right moves now can set you up for success.
Can you think of any other ways to make your money work for you automatically?