By Robert Barba
WWR Article Summary (tl;dr) From automating your savings by having money moved from your paycheck to your savings account regularly to using new apps like “Simple” and “Moven,” there are small simple things you can do now to build up your nest egg for the future.
Opening a savings account is easy, but committing to savings? Now that can be hard.
From struggling to find places where you can reduce spending to falling into the temptation of instant retail gratification, saving money can be really challenging.
“You really have to know yourself and discipline yourself if you’re going to be an effective saver,” says Greg McBride, CFA, Bankrate’s chief financial analyst.
Learning to live on less may feel difficult initially, but it will pay off in the future.
Here are 4 steps to start exercising savings self-control today.
Pay your account out of your paycheck
Automate your savings by having money moved to your savings account regularly, either through elections with your direct deposit if you receive a regular paycheck or by setting up a recurring transfer to your savings account.
Moving money directly to your savings account is a crucial first step in building a nest egg, McBride says.
“Paying yourself first clears the biggest hurdle for saving, which is simply not being in the habit of saving,” McBride says. “It takes care of saving money before you have a chance to spend it.”
Similar to putting money in your 401(k), the idea is that if it never touches your hand, you won’t miss it.
Avoid the temptation of transfers
Moving money into your savings does you little good if you constantly raid the account.
To effectively grow a savings account, you have to restrict yourself from the temptation to transfer those funds to your checking account.