Account automation is not about willpower. It is a means of replacing willpower. Willpower is the unsuccessful strategy that is the reason why so many are in debt these days. We are learning as a culture that, for most of us, willpower does not work. But, automating your accounts does work. It removes money you should be saving from your checking account just after it is direct deposited, so you cannot easily spend it. Letting the power of automation work for you means saving time as well as money.
Set up direct deposit with your employer, so that your paycheck gets automatically deposited into your checking account.
Log into your credit card institution’s website and find their auto pay feature for your credit card. You do not want to be late on a payment, ever. Being late looks bad on your credit report and costs extra fees. So, automate your credit card account to automatically pull the minimum amount due from your checking account. It is always better to pay off your credit cards as soon as you can, but for now, make sure that there will be no late minimum amount due payments.
Set up your savings account so that the day following the direct deposit of your check, a fixed % of your check is automatically deposited into your savings.
My savings account automatically receives a small amount per month from my checking account (which receives a direct deposit each month), on which I earn a variable 0.75% Annual Percentage Yield. Compare that to Bank of America’s regular savings account APY of 0.01%. There is no contest.
Enjoy the same 0.75% APY as me, and get your friends and family to upgrade their bank with Capital One 360 as well… and you both can earn some cash. You’ll get a $20 bonus to your account for every person you refer that opens an account – up to $1,000… although, bonuses for 360 Savings are only paid if the account is opened with at least $250. Any bonuses I get from this referral will go to paying for Ecoculture Village projects.
Do you have an automated savings plan?
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