The easiest way to start saving, regardless of whether you’re putting the money into your savings account or investing the money in your 401(k), is to pay yourself FIRST.
What does that mean? Well, the easiest way to not spend your money is to not have access to it in the first place. If you’re able to, elect to send part of your paycheck to your normal checking/savings account and part to an “absolutely no-touch” high yield savings account. Or, if that’s too complicated to work out with your HR department, set up automatic transfers on the days you get your paycheck to send money to your high yield savings account.
Essentially, before you can even touch it, move the money out of your commonly-used bank account and put it in your no-touch account. Automizing it will take the brainpower out of it – as well as remove the temptation to spend.
Many companies allow you to select an amount or percentage of your paycheck to direct to certain accounts. Start small – directing a digestible amount to your high-yield savings account. Once you’ve had three consecutive months where you didn’t have to double-dip back into you HYSA to “save yourself” from a surprise expense, think about boosting the amount up a bit.
Before you know it, BAM! That high-yield savings account will not only have grown with your contributions, but also with interest.
The hardest thing is just getting started. So, if you don’t have a second bank account, or a high-yield savings account, open one today. I personally use Ally, but there are tons of options out there. Then, tomorrow – check in with your pay platform/HR and look into getting that separate contribution set up!
Every little step forward can lead to big returns later on. Go ahead and get started!
Financial Freshman 