The easiest and most effective way to save is automatically. Think about it, saving automatically is the exact same way that millions of employees save through 401(k) and other retirement programs at work. So, taking that same concept— that you can “set it and forget it” and adjust to money going directly into savings would work for ANY savings goal you have— including saving for retirement, an emergency fund, homeownership, education, or even a vacation.
How to Save Automatically
Automatic savings simply means you have a process in place to save at regular intervals, whether that’s quarterly, monthly or with each paycheck.
If you want to save automatically, we suggest one of these two strategies:
- Split to Save. Instruct your employer to direct a certain amount from your paycheck each pay period and transfer it to a retirement or savings account (or both). Traditionally, you can set this up using your employer’s direct deposit. Ask your HR representative for more details.
- Scheduled Transfer. Choose a day of the month or a regular interval, such as every 2 weeks, to transfer a set amount from your checking account to your brokerage account. If you're a client of Beaird Harris, we can help set this up for you.
Why Automatic Savings Works
Over time, these automatic deposits add up. For example, $1,000 a month accumulates to $12,000 a year and $60,000 after five years, plus interest that has compounded. If you invest this money in your brokerage account your money could grow even more over time.
If you're a new saver, learn more about how Beaird Harris helps Young Professionals and New Doctors start down the road to firm financial footing.
Ginnie Baker
