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6 Ways to Automate Your Savings

There are plenty of ways to help you save for your goals without even thinking about it. One of the best ways is to set up an automatic savings plan.
 

Laptop screen saying Automatic Savings Deposited

Sometimes, saving money can seem like a struggle. Maybe you’ve forgotten to put money aside over a few months, or you find more occasions to treat yourself than you’d really like to. Or perhaps an unexpected expense has come up that used up what you did have saved. Life happens, but it’s important to get back on track when you can.

There are plenty of ways to help you save for your goals, both long and short term, without even thinking about it. One of the best ways to do that is to create automatic savings so that when you need that money, it’s already set aside.

Why save more money

Emergencies

No one wants to think about the possibility of an urgent, unplanned situation that requires money to fix. But the reality is that we’ll all encounter these moments at some point, so having some money set aside to deal with them can help ease the stress when they do happen.

Putting together an emergency fund of even a small sum each week can relieve some of the pressure when you need to pay for an unexpected expense. Situations like losing your job, your car breaking down, a broken appliance, or even medical expenses are all possible, so saving ahead of time is a great idea.

Retirement

It’s never too early to start saving for retirement. When you’re no longer working, these retirement savings will be what funds your lifestyle if you want to continue living in the same way you do right now. 

You can start saving with a work-sponsored plan like a 401(k) or set up your own retirement savings plan at a local bank. Once you feel like you’re getting ready to retire, you’ll want to see how much you have saved and if that can sustain your lifestyle moving forward. Deciding when to retire is a big decision, so assess your financial situation ahead of time to see what’s possible.

As you get older, you should reflect on how much you have in savings at milestone ages and if you need to start saving more money to achieve your retirement or other financial goals. 

Enjoyment

You don’t need to have set goals or a particular reason for saving money—retirement and emergency funds are important, but so are fun trips like vacations or doing something you’ve always wanted to do.

Make your money work for you and save for the things that make you happy and will bring you the greatest enjoyment!

6 ways to automate your savings

1. Set up a direct deposit


If you’re not already getting your paycheck deposited into your checking account, you should set this up as soon as possible. This will save you a trip to the bank every few weeks to deposit your earnings, and it also means that you can move your money around into savings accountsretirement accounts, or other accounts you may have.

2. Split your direct deposit


Once you have your direct deposit going into your checking account, consider splitting that direct deposit between your checking and savings accounts. This is one of the easiest savings plans to implement, as your money will then go into savings straight away and be less tempting to use.

3. Employer-sponsored retirement plans


If your employer offers a 401(k) or similar retirement plan, you should consider opening one of these accounts. This means you’ll have money taken out of your paycheck pre-tax and deposited into this account. Many employers will also match up to a certain percentage of what you pay in, which means you’ll get additional money into your retirement savings!

Tips Ways to Automate Your Savings  1 Set up Direct Deposit  2 Split Direct Deposit  3 Employer Sponsored Retirement Plan  4 Health Savings Account   5 Automatically Transfer Between Accounts  6 Direct Deposit Your Tax Refund

4. Health savings accounts


Some companies also offer the option for you to have some of your paycheck deposited into a health savings account. You’ll be able to make tax-free contributions, along with tax-free deductions for approved medical expenses that come up throughout the year. This can then help lower your taxable income for the year. However, it is important to note that you will need a high-deductible health plan, typically $1,500.00 for an individual and $3,000.00 for a family, to qualify for contributions. Usually, the out-of-pocket costs each year are higher, but an HSA is still an excellent account to take advantage of.   

Your contributions can also be rolled over to the following year, so you don’t have to worry about losing any money if you don’t need to spend it during any given year. Beyond that, you can also use HSA funds for medical-related expenses that don’t require a doctor, like buying sunscreen or cold and flu medication. Once you’re over 65, you’ll be able to use those funds for non-medical purchases, too.

5. Automatically transfer between accounts


One of the biggest benefits of having a checking and savings account is that you can set up automatic transfers to occur each week or month. You can also stop these transfers if your situation changes or increase and decrease the transfers as you like. This can be easily set up via your online or mobile banking portal.

6. Direct deposit your tax refund


If you get a tax refund most years, think about having this directly deposited into your bank account. This can be especially useful if you have a high interest savings account, as this money can start to earn higher interest as soon as it’s deposited. You could use that money for a vacation, a home upgrade, or to grow your long-term savings.

Bonus: Consider automating your bills

While this may not be an automated savings plan, automating your bill payments prevents you from ever missing a payment, which can result in late fees and leave you with less money left over each month to put into savings.

Be careful when automating certain bills, though, like credit cards. You always want to make sure you have enough money in your checking account to cover those automatic deductions.

Develop a savings plan

Automating your savings should be part of your overall savings strategy, but there are many other ways to save money. Cutting costs on your everyday expenses is one of the best ways to free up cash in your budget, and frequently reviewing that budget can help you be more successful in saving for your financial goals.

Create a long term savings plan that allows you to save a little each month toward your most important goals. Evaluate your current situation and establish what your goals are. From there, you can map out a timeline to achieve these goals. That may mean switching banks or working with a wealth manager to find a better home for your current and future savings, or it could mean relooking at your budget to find areas where you could be saving more.

Automate your savings today

Want to deposit money directly into your First National Bank and Trust savings account? We can help. If you don’t have a savings account set up yet, we have several options for you to consider. Our First Choice account is a simple way to start saving, while our Money Market accounts are best for individuals with larger amounts ready to make the most of their savings. Start saving now for the holidays or something special with a Four Seasons Savings Club account.

Contact us today or stop in at one of our convenient locations in Southern Wisconsin and Northern Illinois to open an account. We are conveniently located in Beloit, Argyle, Monroe, Darien, Delavan, Janesville, Elkhorn, Clinton, Walworth, and Williams Bay, Wisconsin, and Winnebago, Roscoe, and Rockton, Illinois.