Comments on: Treat It As A Bill: How I Made A Commitment To Saving Work For Me

By: EverythingFinance

EverythingFinance — Mon, 27 Aug 2007 13:55:00 +0000

I couldn’t agree more…treating your savings as a bill really helps.

By: Barb

Barb — Thu, 02 Aug 2007 15:43:08 +0000

I love these ideas. I bought my roommates Jeep from her with no interest. I have that pmnt taken out of my check twice a month and put into my Christmas club at my credit union. Can’t touch the money until October and I earn a bit of interest over the long haul. I transfer the money in October to a 6 month CD and make her some interest too. Keeps me from making loans to myself!

By: Jen

Jen — Sun, 15 Jul 2007 20:45:00 +0000

Lol, I wish I had a “floating” balance every month. I’m working on it!

By: glblguy

glblguy — Sat, 07 Jul 2007 15:44:11 +0000

@Russ – Russ, I do the same exact thing. Great way to keep from spending and to save.

By: Russ

Russ — Fri, 06 Jul 2007 22:56:31 +0000

Something I find useful, contrary to expectations, is to maintain a checking account with a poor interest rate (0.1%). Every month, the day before my paycheck is credited, I move my ‘floating’ balance to a high-interest savings account. It’s easy to do this because I can tell myself the money is going from a 0.1% rate to a 5% rate – but once the floating balance has gone, I tend not to think about it any more. Out of sight, out of mind. If the money stayed in my checking account, for which I have a checkbook and ATM card, somehow I am far more likely to find a way to spend it. Therefore having a good reason to move money out helps me in the long run.

By: Moneymonk

Moneymonk — Fri, 06 Jul 2007 17:37:40 +0000

I did this also, I treat my daughter education fund as a bill

By: glblguy

glblguy — Fri, 06 Jul 2007 16:56:15 +0000

Great article and a really great idea for creative ideas around savings.

I make mine automatic, and weekly. I set up an ING Direct account, and just have money transferred every Monday. I did it weekly so the amount didn’t look so large and to be honest, I don’t even notice it. It’s really great to look at my ING Account once a month when I do my net income statement, and see it growing.

I also use the automated deposit for end of year property taxes, and a Christmas fund. Just pull a fixed amount out monthly, and budget it as you say, like a bill.

By: Cheap Like Me

Cheap Like Me — Fri, 06 Jul 2007 16:16:39 +0000

This is great, and I agree that it works very well. I use the same principle to save for coming expenses: While we pay my daughter’s tuition twice a year, I’ve divided the annual amount by 12 and count that as a monthly bill that I transfer into savings. Same for other expenses like her summer camp, holidays and housing expenses. I’ve been doing this for six months or a year, and when the bill comes, I’m still pleasantly surprised that I already have money set aside for it.

By: Mardee

Mardee — Fri, 06 Jul 2007 11:18:50 +0000

I’ve been doing this for awhile now. I have my credit union account, which is where my paycheck is directly deposited. I keep enough money in there to pay for my mortgage, student loans, utilities and other monthly non-discretional bills.

However, everything else is transferred periodically into my ING accounts – I have a basic Electric Orange checking account, which goes to discretional bills like credit cards, etc. I also have money going into a regular savings account for emergency use, etc., and a second vacation/fun-money savings account with automatic transfers going into each every paycheck. Once I get my last credit card paid off in the next few months, I’m opening up a third savings account for the new furnace I know I’m going to need in a few years.

I already have 25% of my net pay taken directly from my check and put into both a 401(k) and a Roth IRA, so I don’t have to worry about retirement money. This works really well for me, and I love the fact that I can go into ING at any time and control all of my accounts.

By: Callum

Callum — Fri, 06 Jul 2007 09:44:37 +0000

George S. Clason - The Richest Man in Babylon says your investment should be the first payment you make each month. First you save, then you spend. I have a friend who has his company send about 40% of his salary (he's making more than he needs) directly to his savings account which is very difficult for him to get at. Works wonders.

By: Mark A

Mark A — Fri, 06 Jul 2007 05:45:26 +0000

Excellent post, I have my employer deposit 10% from my paycheck into a savings account for this very purpose.

This does give me some ideas for my own article along these lines though.

By: bluntmoney

bluntmoney — Fri, 06 Jul 2007 04:21:57 +0000

I do exactly the same thing: on the 15th of every month, I have a little transfer-fest transferring money to our various savings accounts.

By: Rebekah

Rebekah — Fri, 06 Jul 2007 03:01:12 +0000

I lucked out: last summer, my bank offered a VERY good Roth IRA rate. What I do when I get my paycheck is to write my deposit tickets; one is always $XX, for savings. Every month, 4(times)$XX is taken right from my account and goes into the Roth. The rate is 15 times what my savings account was. I never see the money because I deposit it as soon as I get my check.

(When I get home from the bank, I pay my bills online from the deposited money. No postage. Even one-time bills, like a copay for lab work, are paid online so that I can track them faster. When I’m done, I see what’s cleared; my account is balanced within $2 that I can’t figure out – but it’s pretty close.)

By: guinness416

guinness416 — Fri, 06 Jul 2007 01:36:02 +0000

Yeah, we’ve done this for quite a while too, and it works a treat. The “different bank” is key – otherwise it’s too easy to “lend” your chequing account money when it seems to need it.

By: Jim Lippard

Jim Lippard — Fri, 06 Jul 2007 01:10:42 +0000

Bank of America now offers a program called “Keep the Change” where every Visa check card purchase gets rounded up to the nearest dollar and the extra “change” is transferred from your checking to savings account–and as an extra bonus, Bank of America will match all of your contributions to savings for the first three months, and 5% of your contributions per month thereafter. Not a bad way to build your savings. (Of course, they don’t offer a savings interest rate that matches HSBC Direct, ING Direct, or T-bills.)

By: Jake Smith

Jake Smith — Thu, 05 Jul 2007 23:49:26 +0000

Great idea Trent!

By: Danny at Money Socket

Danny at Money Socket — Thu, 05 Jul 2007 23:44:15 +0000

Thats exactly what everyone should do, its a mental thing. If you force yourself into a habit of moving money over to your e-savings, you won’t even think about it any more. You’ll just do it and it feels good when you see your savings increasing every month.

By: Sean

Sean — Thu, 05 Jul 2007 23:37:23 +0000

This idea of making savings a bill is an excellent idea, I’m going to put this idea into effect right away! If you think of put that money into your savings account as a required bill that you can’t get out of, then it is a lot harder to justify to yourself why you might need something if you just don’t have the money!

By: jackie

jackie — Thu, 05 Jul 2007 23:15:50 +0000

I am in the process of paying off some old debt. My plan is to take the same amount once the debt is paid off and put it into savings. If I can do it for debt, I can do it for me. thanks for a great post.

By: Dan

Dan — Thu, 05 Jul 2007 23:09:05 +0000

It’s a great idea that I follow too, even on my budget I have my savings listed as an expense and to me it is, but one that pays off in the end. I do need to work on minimizing that “floating money” you speak of though.