Summary List Placement
After recovering some of the income I lost due to the pandemic, I set up one of my paychecks to be directly deposited into my high-yield savings account.
I also turned on a Surprise Savings feature offered by Ally Bank and set up savings buckets to keep me motivated.
In less than three months, I was able to save over $10,000. My savings rate in those three months averaged 60%.
See Business Insider’s picks for the best high-yield savings accounts »
Ever since I realized the power that saving money has to help me achieve my goals, I’ve been addicted. Unfortunately, spending money comes far more naturally to me than saving it.
Over the years, I’ve developed lots of tricks — some of them purely mental — for boosting my savings. When my income took a hit during the coronavirus pandemic, I stopped saving for a few months and ended up having to pull $5,000 out of my emergency savings fund. As soon as my income recovered, I knew I’d have to implement a few extra hacks to put my savings rate into overdrive and make up for lost time.
In the past three months, I’ve saved over $10,000 and got my savings rate up to roughly 60% thanks to this three-prong savings strategy.
1. Setting up automatic deposits so I save money without even trying
Hands down, the best method I’ve found for saving more money is setting up recurring transfers into my savings account. I’ve tried a few different methods for automating my savings and recently discovered my favorite.
As a freelancer, my income comes from several different clients. When I onboarded a new client after the pandemic that would make up for virtually all the income I’d lost, I set up my direct deposit so that my entire paycheck from that client would go straight into my high-yield savings account. I’d been getting by without that income up till that point, so I knew I could manage to put it all into savings.
You can also have a percentage of your paycheck direct deposited into your savings account, or just set up automatic recurring transfers. I prefer to avoid having that money ever touch my checking account so that I’m not tempted to spend it. I keep my savings in a high-yield savings account with Ally, a different bank from my checking account. While a transfer to my checking account is usually processed in a day or two, that extra barrier prevents me from spending impulsively.
This one trick was responsible for most of the money I saved, netting me over $2,500 in August, almost $6,000 in September, and about $2,000 in the first two weeks of October.
2. Turning on the Surprise Savings feature for an extra boost
I’ve had a few different high-yield savings accounts, and my favorite has always been Ally Bank, even when rates dip slightly below what some competitors offer. It’s because Ally seems to …read more
Source:: Business Insider