The following is a guest post by Aaron at Three Thrifty Guys.
I’m all for tricky ways to help myself save more money. To me, savings is just as important as paying down debt.
When you have a cushion (or emergency stash) you will be better equipped to manage life’s unpredictable moments. Because, Lord knows, they will happen.
One way I save more is by treating savings like a bill payment. When we receive our automatic deposit into our bank each week from work, I go online and transfer some money into a savings account. Simple as that.
Benefits of “bill savings”
Here are a few reasons I like treating saving money as a bill to be paid:
- Makes it feel more “urgent.” (something that has to be done.)
- The money is taken out of account right away – Outta sight, outta mind.
- We spend less when there is less money in the “general fund.”
How much should you save?
Obviously each situation is different – but the more you can put away the better. Get a sense for how much money you’ll need to pay other bills that week and other miscellaneous expenses (food, clothing, entertainment, petty cash) and then put the rest away.
If you are making any money “on the side” in various activities (selling stuff online, side-jobs) I would put all that into savings.
If I had to give a number, I’d put in at least 5-15% away.
Does it have to go into savings?
No. There are plenty of other vehicles to put money away. And, savings accounts aren’t generally known for their high rate of return. If you opt for a savings account, try picking a high-yield one. Otherwise, you could put money into a money market or invest it.
Your turn: Are there other tricks you use to get yourself to save more?
Aaron writes at Three Thrifty Guys, a personal finance site devoted to helping folks keep a few more bucks in their pockets (and purses).