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| 9.5 | Money Tip - Use Direct Deposit to Automate Your Monthly Savings |
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How to make saving easy and guarantee that you have a nice nest egg when a safe investment opportunity arrives by automating your savings with direct deposit.
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 | Rich people take advantage of opportunities! The right investment opportunities are rare. You have to make sure that you will be ready when one arrives. How many great investments have you missed already because you did not have the cash? Make sure that you don’t miss the next one. This is why the golden rule of getting rich is, “Save at least 10% of your income for yourself”.
It is much easier to create a savings habit by using direct deposit. This will automate your savings so that you do not have to think about it. You are not tempted to spend the money. It is automatic. You will forget about it. When the time comes, you will have a nice nest egg for the right investment.
With direct deposit, you can take a percentage of your pay (start with at least 10%) and have it automatically placed in a different high interest savings account. There are no checks to sign, you do not have to go to the bank yourself, and everything is done automatically. You do not have to worry about loosing a check or taking time out of your busy day to personally carry the money to the bank.
To set up direct deposit, talk to the people who pay you. As long as the money that is going to you generates from a bank, this money can be automatically transferred to an account of your choice. Ask for a “direct deposit form” from you employer.
You can download the standard form provided by the Treasury Department at the end of this article. The direct deposit form will typically ask for four things:
1. Your name.
2. The ABA number (this is usually the first 9 digit number at the bottom of your checks.)
3. Your bank account number (this is the other long number at the bottom of your checks.)
4. The name and address of your bank.
All of this information can be found on one of your checks. Sometimes your employer will ask you to provide a voided check to set up direct deposit. This way, they can get the correct information without fear of typos. Just write void across the entire check and attach it to the form.
The United States Government even offers direct deposit for tax refunds and Social Security payments. When you get this type of bonus money, try pretending to yourself that you did not get it at all and put the whole thing in your savings account. Your nest egg will grow that much faster and it will not affect your monthly budget at all!
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Further Information
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| Leave a Comment About the Tip: 'Use Direct Deposit to Automate Your Monthly Savings' |
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| Comments | Showing Comment 1 - 1 of 1 |
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| 1 | Out of Sight Out of Mind |
| You have to trick yourself with money management. If money burns a hole in your pocket, get the money out of your pocket. Direct deposit is a great way to get the money out of your mind.
The cold hard fact is that you will spend all your money. How many raises have you had where? You still probably do not have enough money and you feel the same as you did before the raise. This is because we spend all the money!
If you can pretend like you didn't get a raise, you trick yourself into spending. Direct deposit is a great way to do this.
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| Comment 1 On:Use Direct Deposit to Automate Your Monthly Savings
Added On: 2/22/2009 4:25:47 PM |
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