It’s easy to get overwhelmed when thinking about personal finance and I am by no means an expert. In all of the resources I have ever reviewed for myself or for my students one of the first principles ALWAYS discussed is the importance of savings (spending less than you earn.) The concept of “paying ourselves first” is easy to talk about but difficult to put into practice.
Putting money aside for later use comes naturally to some…..for the rest of us out there we have to find ways to train ourselves to save. For me, keeping the money in my checking account is a sure way to fail. I have to move the money out into another account where I won’t be able to access it at the register without transferring it back. However when we sit down to do our budgets it is SO easy to talk ourselves out of making the transfer to savings.
That’s where automatic transfers come in! Automatic transfers allow us to take the decision out of saving and most banks offer this service. These savings accounts come in many forms from time released accounts, such as holiday or vacation club accounts to traditional savings accounts to rounded transfer accounts. A great example of a rounded transfer is Envision’s Coink program which rounds up each transaction from your debit card to the next dollar and transfers the extra cents into a separate account.
I know many of you out there are already using these kinds of services but I feel it is still worth pointing out because our students don’t have the same experience we do. I am often surprised by how many of my seniors don’t even have a bank account yet.
TAKE ACTION:I challenge you to ask someone you care about this week if they have ever used automatic transfers to help them save before and to tell you about their experience. Has it helped you become a better saver? Have you ever had a time when you’ve had to use or rely on your savings? What is the hardest part about saving for you?
Be it family member, co-worker, student, child, parent, friend; it doesn’t matter. Lets try to encourage and empower one another to have a positive (nonjudgemental or lecturing) discussion on the challenges of savings and see if we can’t come up with ways to help each other improve.