3 Steps to Start Saving Money With Auto Transfers

by J B

Knowing how to save money is the foundation of personal finance and is critical to financial freedom.

Many see it as something impossible to master, as if an outside force forced them to spend all their income. Not so, and you are going to learn a way to save money that really works.

Before starting with the steps, you should consider the following:

As much as my system can teach you, if you don’t do your part, you won’t save a penny.
If you want to save the “typical” 10% of your salary, this way of saving money will help you, although it is designed to save much more money.
Consistency is the key to success; Saving money every week or day is what will make a difference.
With this clear, we are going to see the two methods that I want to teach you: a very simple one to apply right now and a more advanced one that needs a little more organization.

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Let us begin!

It is the easiest method to save called pre-savings or pay yourself first. Simple and effective.

Carrying out it is very easy, it consists of scheduling a transfer in your bank at the beginning of the month (or when you get paid) to set aside the amount you want to save. That money should go to another account or bank where, ideally, you don’t have a credit or debit card.

As you can see, it doesn’t have much of a secret.

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Anyway, we are going to see very quickly the steps that you should carry out to save with this method.

Step 1: Think about how much you want to save each month
First of all, you must define how much you want to save exactly each month.

It is best to start with a reasonable amount. We will increase it later so that you can save even more each month.

The amount to save will depend a lot on your income and personal situation, so there is no better person than you to define it. Anyway, in the following table I give you examples of what I consider to be good savings figures based on monthly net income.

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The next step will be to see where to send your savings month by month. Ideally it should meet the following conditions:

  • a bank account in your name without an associated credit or debit card
    -No fees for maintenance or transfers
    -Pay interest without risk (optional)
  • 3: Schedule the transfer
    With all this, you can now schedule a periodic transfer from your bank to the account you have decided in the previous step.

The best thing is that the transfer is scheduled a few days after your collection day. For example, if you always charge at the end of the month, the transfer can be scheduled on the 2nd or 3rd of each month.

Here you should also make sure that your bank of origin does not charge you any type of commission for making these transfers.

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