It’s happened to the best of us – you jump in the car to head to work and when you go to start it –nothing. The car won’t start. The mechanic says it’s your alternator and now $800 stands between you and transportation.
 
For many of us saving money is tough. In fact, as humans, we’re wired to take care of our needs now and worry about later… well, later. Putting resources away for an emergency actually goes against our natural urge to make decisions based on what’s in front of us right now. Here we’ll take a look at some strategies to help build financial slack by automating your savings.

 

Getting started

One of the easiest and most stress free strategies for building a savings account is through automation. This strategy helps you send a percentage of your paycheck directly to a savings account. Think about a dollar amount you can begin saving that’s not too intimidating. It doesn’t matter if it’s $10 a month or $500 we all have to start somewhere. The goal is to make reaching our savings goals stress free. Automation makes it easier to stick to your savings goals and building financial slack.

3 ways to automate savings

1. Set up an automatic transfer once a month. Every month have your financial institution transfer a fixed amount (whatever is comfortable for you) from your checking account to a savings account.

2. Direct deposit from your paycheck to savings. Set it and forget it. This type of automation helps because you’ll never even know it’s gone. Every pay period have your employer deduct a certain amount from your paycheck and deposit it in a savings account. This is typically called a split deposit. If you are unable to set this up independently through your payroll system talk to the person at your company in charge of payroll to see if you can set this up.

3. Max out any retirement benefit your company offers. If your employer offers a retirement account, sign up and deposit at least the minimum contribution to receive any matches they may offer. Most companies allow you to set up this deduction from your paycheck to happen automatically. Ask your human resources person for more information.

Let’s make a plan together

At Credit Human we offer free financial counseling and expertise to support our members in meeting their financial goals. We are ready to spend time with you in our Financial Health Centers to learn more about your financial realities and discuss ways we might support you.