My parents instilled two financial lessons into me from a very young age: Never go into credit card debt and always have a rainy day fund. I took heed to their advice, and I didn’t get my first credit card until after I graduated from college and got into my career. During that same time, I started my rainy day fund. And I soon found out how hard it was to consistently deposit money into the account without removing it at a later date. After some trial and error, I finally found a way always to save money and use it only for its intended purpose. I’m going to share the two tips that helped me save thousands in one year.
How To Save Thousands In One Year
Separate Savings Account
The first step that I took was opening a different savings account that’s not linked to my checking account. How did this help me save consistently? Out of sight, out of mind. I started seeing my checking account money as my only available money. The separate account stopped me from transferring money from my savings account instead of budgeting what I had available.
Direct Deposit It
To prevent myself from using my savings or not transferring the money at all, I started depositing part of my paycheck directly into the separate savings account. This way, I didn’t have any excuse for spending the money. I looked at it in the same way that I do my health insurance payments or my 401k. My thought process is, Am I missing something that I never had in my possession?
Don’t Put It All In One Place
If I’m saving up for different things, I never put it all into one account. I’ve had times when I forgot what money I had allotted for what purpose. To prevent that, I stopped grouping all my savings. It’s simple, but it prevents a lot of headaches.
What tips do you have on how to save money?