How many of us struggle to keep money in the bank in between paychecks? Seeing that fresh cash and big number gives makes us feel like we should go out and spend some it it. Why not? We worked hard for it. Money is to be spent.
WRONG! This is a trap waaaay to many people fall into. Feeling flush with cash is a good feeling. For too many of us, we get this rush every two weeks on payday (which happens to land on a Friday… right when we are ready to go out for an expensive weekend of restaurants, drinks, and shopping). Going out isn’t like it used to. A night with friends can easily cost $100 bucks without trying too hard. Especially when you live in a high cost of living (HCOL) area and a domestic beer costs $10 bucks. Multiply this by 4 times a month and there goes $400 bucks. For the real party animals out there – If you go out Friday and Saturdays, that’s upwards of $800 gone. The cash doesn’t come back, until your next paycheck when you are ready to do it all over again.
You know what’s more fun than spending money? Watching it grow. What a rush!!! At least for me anyways. Is that sad? Probably. But I’m not crying about it, I’m thrilled.
My fiance and I both work for big companies, and we have direct deposit into our bank accounts. We had both been getting the cash into our checking accounts where we had immediate access. In order to become richer and spend less on frivolous things, we had to feel poor.
We accomplished this by splitting up our direct deposit up between two accounts each (we still have separate bank accounts). We have a monthly budget and split expenses. After expenses, we each have extra cash left over every month. I set up my direct deposit split in the following way:
Checking Account: Exact $$ for monthly budget
Online Savings Account: All Leftover Cash
Take a look at why you should use the online savings account here. Do the same today. You can likely do this either online on your company payroll site or by contacting Human Resources.
This achieves AUTOMATED SAVINGS. No thinking or effort has go into saving a portion of your paycheck with this simple strategy. It ensures that you stick to your budget. We have been saving in our house fund using this method, and the cash in our online accounts has gone up significantly and with ease.