Day 10: Automate Your Short-Term Savings

by Jason Unger

Post image for Day 10: Automate Your Short-Term Savings

OK, there’s not actually any robots involved in today’s post, but the image above was too good to pass up.

Now that we’ve got your accounts open, it’s time to put the system in place to automate your success. The beautiful part about this is that once you set it, you can essentially forget it. You don’t have to worry about remembering to transfer money into your savings each month … it’ll be done automatically.

PS. I haven’t plugged purchasing the PDF version of the ebook in a while, but if you want to support this great content, here’s the link to get a downloadable copy.

******************************

This is where it gets fun. Today, you’re going to set up processes to automatically save for your goals and dreams. And once you get it going, you’ll barely ever have to check back in.

Using your online savings account, you can automate savings from your central checking account on a weekly, bi-weekly, or monthly basis.

But before we set it up, let’s look at the reasons why automating is so important.

5 Reasons You Should Be Automating Your Savings

  • Treat Saving Like a Bill – Instead of waiting until the end of the month to see how much money you have left over, automating your savings treats it like a bill you have to pay. Saving is now a priority; it’s not something you try to do when you can.
  • Pay Yourself First – The second most important personal finance principle – after spending less than you earn – is to pay yourself first. You’ll never build your net worth and reach your goals if you aren’t saving, and automating that is crucial to consistent growth.
  • Remove the Human Element – When your money moves automatically, you never make the mistake of forgetting to put it aside, transferring the wrong amount, or making a mental excuse for why you can’t save it this month.
  • Feel Comfortable – Stop worrying about whether you’re saving enough, or if you’ll have the cash to put aside this month. When the system is set up to work for you, you can feel comfortable that you’re on track to reach your goals.
  • Save Time – Your time is valuable. Why not use these tools to spend your time doing the things you love, rather than managing your money?

Thankfully, ING Direct – and pretty much every other online savings account – makes it extremely easy to automatically transfer money into your specific accounts.

How to Automate Your Short-Term Savings

After you’ve logged in to your ING Direct account, click on the “Transfer Money” tab to get started.

Using your budget calculations from Day 9, enter your monthly savings set-aside into the “Amount” field, with the money moving from your central checking account to your specific goal account.

Choose the recurring frequency, with the transfers happening monthly on a day that you choose.

Select a start date, with a finish date of the specific month you’ll reach your savings goal.

Click continue, double-check everything, click accept and … you’re done!

Literally. That’s all you have to do to automate your savings.

It’s so easy, you’re probably wondering why you haven’t done this before. You’ve done it now; that’s what matters.

If you’re going to be saving for more than one short-term goal at a time, repeat the automation process with the money going into its designated fund.

Remember to set up your once-in-a-while fund to be automatically filled. Even though it’s not technically a savings account, treat it like one until you need to access the money to pay those bills.

Shouldn’t It Be Harder Than This?

Saving your money isn’t hard when it’s happening automatically – that’s the beauty of it.

How often have you worried about whether you’re saving enough (or at all)? Have you ever worried about needing money in an emergency?

When you’ve got the money in the bank – and are growing it monthly without a lift of your finger – those worries disappear. And when the day comes that you need to spend that money, you don’t have to worry about having it at all. You’ve got it.

Now that you’ve got your short-term savings in place, it’s time to move on to your longer-term goals, including retirement. We’ll take a look at that tomorrow.

TIP: Don’t forget: after you set up your short-term transfers, you should still have money left in your flux account for retirement. If you’re down to nothing, you’ll need to slow down your short-term savings. Take a few more months for your vacation fund, or save for fewer short-term goals at a time.

Previous post:

Next post: