There are 100's of things I have done to try to save money. Some have saved us a little and some have saved us thousands. If I had to list off the best things we have done to save money automating my husband's paycheck would be on the top 5. We never actually see my husband's paycheck. On payday, it is split into 20 or so different directions by having direct deposit. It's deposited into retirement accounts, college accounts, and our 18 different bank accounts.
If you feel like you are coming up short every month on money, automating your paycheck might be the help you are looking for. By setting up a direct deposit each week you don't have to think about where your money should be going. It automatically goes there for you. How awesome is that! Below are a few of my favorite reasons to automate your paycheck.
It's Harder To Access Money
When you automate your paycheck it will be deposited into the bank accounts instead of getting a paycheck. No more cashing the paycheck and then blowing a bunch of money on a nice dinner before you even get it to the bank. It just makes it a little harder to spend. You can still go to the bank and get it out, but it's a lot harder than just grabbing an extra $20 before you deposit the cash.
I Don't Ever See Some Of The Money
I don't have a clue what my husband's paycheck actually is. By the time I see the amount we have already contributed to our 401K and 529. I don't ever have to think about contributing to retirement and college accounts because it automatically happens. The best part is, it is the first thing we do, not an afterthought.
It's not something we ever have to think about, it's just there accumulating more money every month. A couple of times a year we will sit down and take a look at those accounts and I am shocked what we have been able to accumulate without really thinking about it.
Money Gets Put Where We Need It
After the deposits into retirement and college savings, we have it broken out into 18 different bank accounts. Yup, I know, 18 is a crazy amount. But, that is what works well for us. We have one for healthcare, our house, bills, cars, vacation, Christmas, and so on. Some of them don't get a lot of money deposited into them each week, but they don't always need a lot. If you do $10 in a Christmas account then you will save over $500 dollars a year for Christmas. We never think about that money because it is sitting in its own account. I have found that it is easier to just have the money put in the accounts that we need.
It Saves You Time
Once you get everything set up you will save so much time from week to week. No more running to the bank within their hours. You can easily do most things you need at home on your computer. You will need to remember to check out the accounts once or twice a month. Besides that it can be very hands off.
Obviously, accounts like your house account and healthcare get filled first and what you have leftover is your everyday spending like going out to eat, vacation and Christmas. But, by automating your paycheck you can make sure that the money is going towards things like Christmas and vacation.
Figuring out what accounts should receive what amount of money will take some fine tuning. But once you figure it out it will be a piece of cake from there on out. With this simple tip, we have been able to go on vacations every year, pay cash for Christmas and buy all of our cars with cash. Direct depositing your paycheck can save you $1000's of dollars a year.