Saving money is an important topic talked about everywhere. We talk about it here regularly because it is a pillar of personal finance. Saving money is the backbone of financial literacy.
You will often read about so many different ways to save money each month. I find X ways here, Y ways there, and everything else in between. Who knew there are 50+ ways to save more money. Heck, we have written about these simple ways before as well.
Saving money is extremely important to advance your wealth or protect you when things go south (and they will). Our tried and true method to make sure you are saving (or investing) is to treat it like a monthly bill. This triggers your brain to come up with ways to find the money necessary for saving. It’s similar to the “pay yourself first” mantra, but this goes a bit further since most people don’t want to miss bill payments.
But over the years, I have found the only one solution that works each and every month with out fail, so are you ready to know what it is?
Pay Your Savings Like a Bill
Oh yes, it’s that simple, yet the most effective tools I have found to keep funding savings in some way. Now, when I say savings, this could be an emergency fund, housing fund, college fund, or even investment fund.
We have an account at CIT and they make it really easy to earn good interest and they keep competitive with other banks. You can have an account setup in minutes and customer service is easy to deal with. With a low initial deposit, this is our favorite bank for saving money.
No matter what you are saving for, if you force yourself to pay into your savings every month just like you pay a bill, it will change your mindset on the process.
Many push savings aside when they have some extra money, but if you believe you have to pay it just like a bill, it never gets forgotten.
Setup Automatic “Payments” into Savings
One simple trick to automate this is by just setting up an automatic payment into your savings account or whatever account you use for savings goals. Just like an automatic withdrawal from your checking account to pay your water bill or mortgage, you can do the same thing with your savings account.
This will feel weird for the few few times you do it, but it’s very effective and in my experience the only solution that works to save money every month. You can scrounge around for coupons, dig up old coins and push them through the Coinstar machine, find deals when online shopping, etc, but it will never match treating your savings like a bill.
When you “pay your savings bill” it forces your mindset to change to make sure you are paying it. Just like we never want to be late on our normal bills, this is a method I used to force my mind to basically pay myself first.
What do you think about treating your savings like a bill? Would it help you automate your savings more when you don’t want to miss the payment?