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How To Move Money From Spending To Savings

Money in your pocket gets spent.  So set up a system that moves it where it should go before it gets spent.  

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Send Your Money Where It Should Go

Send It Before It's Spent!

  • To pay your bills or pay down debts, send your money to your creditors.
  • To build a reserve or save for a big-ticket item, send your money to a bank savings account – perhaps a separate account for each objective.
  • To save for retirement, send your money to a retirement account, usually a tax-favored 401(k) or IRA, where it’s typically invested in stock or bond mutual funds.
  • To save for your kids’ education, send money to a college savings account, usually a tax-favored 529 plan, where your money is typically invested in stock or bond mutual funds.

Make It Automatic

It's the Only Way Most People Can Save & Pay Bills On-Time

Set up automated transfers timed to when bills are due and you get paid.

  • For example, if you need to pay monthly bills but get a paycheck every other Friday, set up monthly transfers to pay those bills and monthly transfers – at a different time of the month – for payments not tied to a particular day of the month: to build a reserve,  pay down debt, or save for a big-ticket item or college.
  • To set up automatic transfers on your bank’s website, look for a “recurring payment” option.  You can also speak to a customer service agent by phone or at the  bank.  You’ll need to provide the account numbers, amount and timing of the transfers, and other information requested.
  • For payments that change from month to month, like utility bills and credit card payments,
    • You can often get e-bills sent to your bank and arrange for automatic payment – though sometimes you can’t automatically pay what you want, such as the full balance of a credit card bill.
    • You can also go to your utility or credit card company and arrange an automatic draft – that allows that company to pull what’s owed out of your checking account.
  • Make sure you always have enough in your checking account to cover your transfers.  Deposit your paycheck automatically, if that’s an option.  Schedule transfers when the money should be available.  And look into “overdraft protection,” which might cost money, as a backstop.
  • If you have a 401(k) at work and want to save (more) for retirement, have your employer transfer (more) money from your paycheck to your 401(k). Speak with someone in your human resource department to get this set-up.

Get It Done

Nothing Happens Unless You Make it Happen

If you like, print out this How-To and put  reminders in your calendar to help you move from How-To to Done!

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