I wanted to take a detour from the spending equation of our frugal obsession on this blog with my current post. I finally (better late than never) set-up a recurring transaction to transfer cash from my checking account to my savings account that will transfer $50 on the 15th and the 30th or 31st (last day) of the month, which mimics my pay cycle.
I would like to add that this fund transfer is to fund cash savings. I am already contributing to a retirement account, but want to grow a cash savings account for any spending that may arise before I turn 59 and a half.
I think this is common personal finance advice and something that I learned to be true for me when setting up my retirement savings account. When you only get X dollars in your paycheck, you budget to that amount. This is true whether that's how much you get paid, or if you automatically get money withdrawn from that account through your retirement savings or, I hope, with this fund transfer.
I figure $50 is a good start and hope to be able to increase this transfer over time, as I continue to eliminate wasteful spending from my monthly expenditures. I think that the key is getting started.
So, how about you. How do you save? Do you you have a recurring/automatic funds transfer that occurs with every paycheck?
Nice. I put $275 every monday in my Betterment portfolio at an 80/20 stocks/bond split. I really keep a savings account anymore since the return is poor and my betterment portfolio is liquid as it is a post-tax account.
ReplyDeleteBut I do not have a retirement plan through work. I did max out my 2014 IRA though. Should be able to max out 2015 in January as well.
ReplyDeleteFinding the right mix of cash savings, tax advantaged retirement savings, and investments is difficult to do and hopefully something we can explore with this blog.
ReplyDeleteI wanted to start contributing to my savings account to replenish my savings accounts as I am expected my savings to dip with bills associated with the birth of my second born. Also, I think that I am probably overweighted in my tax-advantaged retirement savings. I think that getting a recurring fund transfer to a betterment account is a great strategy, and something I would like to set up in the future.
I am thinking about changing my weighting to closer to 50/50 in case we have a major correction before the end of the year. Regardless, money not spent is still money you can spend some day.
ReplyDeleteYes, the most important thing is to cut spending and start saving. If you're overweighted somewhere or adopted a suboptimal ratio of stocks and bonds, you're still way ahead of the version of yourself who spent all his money on antiquated cable subscription services.
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