Saving Money Using Direct Deposit

Do you have trouble saving money? Do you live paycheck to paycheck?

Here is an idea that can help.

Have your employer direct deposit part of your paycheck into a separate account.

For example, assume you have a weekly net pay of $500. Take $10 a week and have it direct deposited into your savings account and put the remaining $490 into your regular checking account. Forget about the $10, you probably won't even miss it. After one year you will have saved $520 plus interest. Keep this up for two years and you will have over $1,000 socked away.

Take this idea a step further and set up a total of three extra accounts. Divide up your $500 paycheck. Deposit $10 in an emergency account, $10 for a Christmas savings account, and $10 into a regular savings or investment account. Each time you get a raise, put 20% of your increase in net pay towards your extra accounts.

Saving money this way is easy because it allows you to mentally separate your paycheck. Think of the extra accounts as a withholding tax to yourself. It may take a few weeks to get used to it, but you will learn to live without the money that is being "withheld" from your check.

This method of saving can get you ahead of the constant grind of living paycheck to paycheck. Give it a try!