Friday, July 4, 2014

How to save money the automatic way

Do you find it difficult to save money? Everyone of us know we need to save at least some money but somehow, some of you may find it difficult to save up. Maybe you need to save up for your wedding, for your honeymoon, for your new house or even just saving up for rainy days or retirement but you always fall short of your target. How can you make saving money easier and perhaps on a automatic mode?

If you're saving up manually, it's very troublesome. You have to monitor your budget and control your spending, you have to be disciplined and consciously to put aside an amount every month. It's so troublesome that many of us give up halfway. The good news is, all these can be eliminated.

Automatic saving using technology

We live in a world where everything connects together instantly. Information travels at the speed of light and is available everywhere. We can use this technology to automate our savings plan.

For example, let's say you are aiming to save up $25,000 for your wedding and another $25,000 for your new house, this adds up to an amount of $50,000. Does it seem a lot to you? In fact, this is the minimum CASH which you'll need if you want to get married and buy a house in Singapore.

This was written in my previous posts:
How much money is needed to get married and start a family in Singapore?

Now, don't be afraid of the figure. Let me show you how to automate the saving process to lessen your burden.

Step 1
Open up a new savings account. This can be a joint savings account if you'll like to save as a couple. Can be from the same bank or different bank. It doesn't matter.

Step 2
On your existing savings account (which you credit your salary into), set up an Internet banking account if you have not then login and add a new payee for fund transfer.

Step 3
Set up a standing instruction to transfer a fixed amount to your new savings account which you just opened. You can select the fix date which you want to transfer and select the transfer frequency to monthly. Every month on your selected date, that amount will be transferred automatically.

Step 4
Just sit back and relax and your money will grow automatically. You're on your way to your savings target without having to think much about it.

A word of caution

It is easy for you to set up an automatic savings plan with internet banking but however, it is also easy for you to withdraw and transfer out the money from your savings account. After you make the decision to save, remember to never never use the money in your new savings account for any expenditure. Perhaps you can put it into a short term fixed deposit account after it has accumulated a substantial amount of savings to prevent you from drawing out too early.

Also, when you have lesser cash, there is a tendency you will use your credit cards. If you can't control your spending, then using credit cards may make you even worse off than before.

Saving money is easy

Set a target amount you want to save then set up the automatic savings process. If you want to save $50,000 in 2 years, set up the standing instruction to transfer about $2000 monthly to another savings account. After that, everything is automatic.If all goes well, in 2 years time you'll see $50,000 cash inside your account. Make your new savings account as inaccessible as possible so you cannot withdraw any cash out from the ATM. Only leave the money you can spend on your usual spending account. Try it and see if it works for you. It has worked out well for me so far.

Enjoyed my articles? 
You can Subscribe to SG Young Investment by Email 
or follow me on my Facebook page and get notified about new posts.

Related Posts:
1. Financial planning with your needs and wants
2. 35 and totally broke or $100K savings by age 30?

No comments:

Post a Comment