Separate your savings by setting up multiple savings accounts in addition to your your everyday transaction account. Set up automatic transfers so that you scan set and forget. When you have amassed a decent sum, lock it away using a term deposit.
Separate your savings
We’ve come a long way from the days when hiding your money meant stuffing an envelope full of cash under your mattress. We’ve also heard stories of people who chuck their credit card into the freezer, so that the thawing time would also melt any possibility of an impulse buy! Yet, these days, it’s so easy to open an online savings account that you’d have to be a Luddite not to.
To steer yourself away from temptation, you could consider setting up a separate savings account in addition to your everyday transaction account. Give the account a name that reminds you of exactly what you’re saving for. ‘Forever home’. ‘Burning Man trip’. ‘My wedding day’. You get the idea. If you need an extra deterrent, add a few more words: ‘Do not spend under penalty of death’. If you’re good at following instructions, then you’re on your way to sweet savings.
Once you’ve set up your savings account, you may want to take an extra step: hide the account from view in online banking. Then when you log on to your online banking to pay a bill or check your credit card balance, you don’t see your savings account and you’re less likely to use it.
To help your savings grow even faster, turn on auto-pilot. The less you have to think about saving money, the easier it is to save.
For ‘out of sight, out of mind’ savings, jump onto online banking and set up an automatic transfer from your everyday account (or, whichever account your salary goes into) to your hidden savings account. First, work out how much you can afford to save. Even if it’s just $20 a week, you’ll have over $1,000 in your account after one year. Not bad, huh? Then, if possible, set the automatic transfer date for the day after you get paid so you know money is available for the transfer.
With your savings on auto-pilot – safely stashing your money before you have a chance to spend it on macchiatos or muffins – you’re well on your way to your savings goal.