Being an investment analyst does not mean I am perfect at spending and budgeting! I truly believe in following a budget and do my best to do that, but using cash for everything seems inconvenient most times for my husband and I. With both of our paychecks direct deposited, we tend to be debit card swipers.
I am a HUGE believer in an emergency fund of 3-6 months of must-have expenses. Emergency funds keep you from getting stressed over money and keep you from turning to debt to solve your problems. With that said, I like to always have an automatic transfer going into our savings account each month.
Aside from that automatic transfer, we have always been a couple who would throw our extra change into the extra large wine bottle. A few times our change added up to almost $500 for us! Both of our parents did this, so we did too! When banks came up with the idea to take the change from rounding debit purchases to the next dollar and throw it into a savings account/wine bottle that seemed so logical!
I went to activate this extra change savings feature at my bank but stumbled upon an option to go ahead and add a dollar to every debit purchase and that dollar would then be deposited into our savings account instead of just the change. Seemed like a better option, so I went for it.
I began to notice a dollar here and there transferring to my savings and eventually I didn’t even notice it happening. About a year later I saved an extra $1,000! Turns out my husband and I were depositing an extra $81 per month, on average, into our savings account. We did not notice at all! If you notice your cash flow getting tight you would have to slow down on your swiping. Then begin to use cash instead of swiping. Using cash helps you become more aware of your spending when money is tight.
If you do this easy little feature with your bank you might be surprised what you might have at the end of the year. What would you do with $1,000? If you timed it right you could use that money towards holiday spending, a mini vacation, a home improvement, …there are so many options!
If you do this savings method in addition to an automatic saving or investing transfer, you will be doing yourself a huge favor! Go check it out!
And for debit card swiper folks like us, banks initially came up with the idea that when you made a purchase it would allow you to round the purchase price up to the next dollar and the change would be deposited automatically into a savings account. Now we have other options.
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