In our society saving money is becoming a rare occurrence. Many people have the problem of “money burning a hole in their pocket.” If they have money, they feel like they need to spend it on something. There are ways to help your finances by making your money inaccessible. By saying money in an inaccessible way means it is more difficult to obtain. This is possible via a savings account or online checking/savings account.
Keep extra in a savings account
Each time you get paid, figure out how much you need for necessary expenses and a little extra, then deposit what is left into a savings account. When you are thinking of purchasing something and look at the balance in your checking account, you may not be able to afford it. You could transfer the money from your savings account, but the extra step may make you rethink if you really need to purchase the item.
Once you start saving and accumulate money it may become more important to see the balance rise instead of purchasing items you may not need. With the power of compound interest, each month your balance will increase, even if you don’t add anything to it.
There are some online banks that may offer higher interest rates than standard banks. One pro of these accounts is that you may need to wait a couple of days to withdraw funds. The process of withdrawing money and the waiting period can be a deterrence to taking money out of your account.
Pay yourself first
One important concept in personal finance is to “pay yourself first.” Most people pay their bills first and then think they will put money into savings from what is left. In many cases there may not be much or anything left. Consider your savings as a regular bill also and pay yourself first, then work your spending around that. One easy way to do this is to figure out how much you want to pay yourself from each paycheck, and then either have that amount automatically withdrawn from each paycheck if your pay is deposited electronically, or you can do it yourself. By having it automatically taken out of your paycheck it will be less likely to spend it if you don’t see it.
Saving money is an important part of your personal finance and making your money inaccessible it one way to saving more money.