This little trick is one that I have used for years. I treat my savings account and my regular deposit as a non-negotiable, bill that must be paid.
It’s a mind-set thing that makes me see it not as a luxury, but as a must that I cannot sacrifice. If you miss a phone bill, you get charged a fee. If you continue not to pay it, you get a bad credit rating. So why not see your savings account as just another bill that is due?
While I know I won’t get fined for skipping a deposit, acting like it’s a bill makes me feel compelled to regularly save money and attempt to not break the loop by missing a transaction come pay day.
Making regular payments to your ‘savings bill’
Perhaps you could start an auto deposit a day after you get paid for a set amount that disappears automatically and appears in your high interest account?
As they say, out of sight – out of mind.
I also use a little trick with my employer. I am able to select two accounts to receive portions of my pay. This means I can get a portion of my pay directly added to my savings account on pay day. This makes my savings plan so automatic, I actually once forgot about it for 3 months only to realise and stumble across a nice little surprise.
The trick here is to make the number big enough to progress your savings, though small enough to be insignificant in the scheme of things.
80% goes to my everyday account while 20% is deposited directly into my HISA (high interest savings account). You really don’t miss the money if done correctly.
This is also perfect if you don’t trust yourself to manually transfer the money or a prone to going out for a celebratory ‘pay day beverage’.
It’s addictive checking in on your balance
Because you pay your account like a bill, you don’t get to see the money. It just magically grows. Once you have been doing this for a few months, only then you should login and check the balance. It is addictive watching it grow.
If you can, try and only view it every quarter (4 times a year each four months).
Play the rounding up game with your savings deposits
Every time you do a manual payment to your savings account (like you would a bill via BPAY or similar) – round up the figure you are going to transfer to the nearest dollar or whole figure. Make it a game and you will be surprised how the little bits and pieces begin to add up. As a side note, I do this with my mortgage also in order to add extra repayments in dribs and drabs.
A dollar deposited now means extra interest every second of the day in your HISA.