April 25, 2019
I don’t even need to ask you if you want to save more money. Of course you do.
And yet, it can be so hard to get started and stay committed. I get it.
Here are a few ways you can nudge yourself to saving success.
Have separate savings accounts. Make a list of your main savings goals. Emergency fund? Home down payment? Wedding? A vacation you can pay in cash, not credit cards?
I don’t want you saving for all those different goals in one savings account. Every separate savings goal gets its own separate savings account. Research shows that when we keep specific goals separate it helps us stay committed to the goal.
Many banks let you name accounts online. Do it! Make your goal the name. MyFirstHome. PeaceofMind. WeddingYesDebtNo.
Set up automatic deposits into each account. It can be $10 a month, $200, or $1,000. That’s up to you, and each account can have a different contribution amount. All I insist is that you make this automatic. That is a proven way to stay committed to a savings goal. Having money zapped from your checking account into your savings accounts is free too. The set it and forget it approach is how you will reach your savings goals.
Check out online savings banks. Your local bank is likely not paying you much of anything for money in savings accounts. These so-called brick and mortar banks tend to pay close to zero interest on savings accounts. But at online savings banks you can earn 2% interest or more these days. For example, at Ally Bank, there’s no minimum deposit and right now you can earn 2.2%. And when there are changes in the economy that cause general rates to rise, chances are very good that the online banks will quickly adjust their rates higher.
Don’t worry, online savings banks are just as safe as your local bank or credit union. When you’re investigating online savings deals, just scroll down the page and you will surely see a mention that the account is FDIC-insured. That means you’re protected the same as any other bank.