If saving money overwhelms you, maybe it’s time to try a new approach.
“Trick yourself to be lazy when it comes to savings,” says Dan Andrews, a certified financial planner at Well-Rounded Success in the Denver area.
In other words, make saving more automatic.
Checking and savings accounts offer tools that can aid in building wealth without much effort. Change up your banking with these tricks.
The key to saving is consistency, and that’s where technology can help.
Using your bank’s website or mobile app, create a recurring transfer from checking to savings every month, or if you’re regularly paid twice or more on a monthly basis, consider setting one after each payday.
Automatic transfers free you from regularly deciding when and how much to save--and the setup can take just a few minutes. You need to know three things: which two accounts to use, how often transfers occur, and the amount. Experts recommend you save about 20 percent of your after-tax income. So if you take home $5,000 a month, aim to put away $1,000. If that’s initially out of reach, start with a smaller amount and work your way up to that 20-percent goal.
If you’re tempted to skip saving money right after payday, this strategy might be useful. Instead of a direct deposit into one account, you can have income go straight to two or more accounts. This lets you separate your spending money from your savings right away.
This strategy won’t work for everyone; you need to receive your pay as direct deposits, and your company must be on board. Some employers don’t let you split direct deposits.
If split deposits are available, there can be other perks. Some banks offer sign-up bonuses when you open a new checking account with direct deposit. Just make sure a new account is a useful addition to your financial life and that you don’t get stuck with fees or high minimum balance requirements.
Having one savings account might not be enough, especially if you like focusing on specific financial goals. That’s where single-purpose accounts can shine. (See our recommendations for banks that allow you to open multiple savings accounts.)
Having multiple accounts is easier than it sounds. Start with a second savings account for one purpose, such as stockpiling an emergency fund. Then create a recurring transfer, even if it’s a small amount — say, $50 — to gradually reach your goal. Tracking progress is easy; just check the balance.
“I used to have just two accounts--checking and savings,” says Muriel Vega, a tech writer in Atlanta. “But they weren’t really working for me.”
Eight years ago, she opened a second savings account to use as an emergency fund. When her freelance assignments started ramping up, she opened a business checking account and a savings account to set aside money for business-related taxes. She also has a separate checking account to pay home and utility bills and a savings account for vacations.
“I have seven accounts now. That’s three checking and four savings,” Vega says. Most of her savings accounts are at two online banks that have attractive features such as competitive savings rates and no monthly fees.
On the day she gets paid, she has several automatic transfers ready to send funds to her various accounts. The result: no micromanaging of money required.
“I’ve seen clients save for two months and then … give themselves a pat on the back and stop doing it,” Andrews says. “This prevents them from sticking to their long-term savings goals.”
The savings process takes time, but it doesn’t have to take effort. You can avoid impulsive spending and stick to your goals if you set up an automatic system that does the saving for you.
The article How Being Lazy Can Help You Save Money originally appeared on NerdWallet.