My budget is full of little bracketed notes, all stating when certain things go into and out of my account. In the beginning, I simply budgeted without noting when bills had to be paid. Although I never went into overdraft, I was always living in fear that a huge bill would come along without my knowledge and send my bank account into the negative.
Now, that worry is almost entirely gone. I have a note alongside each item in my budget that states when that payment comes out, whether it’s the first of the month, the first Friday, or some other arcane time. I spend a few minutes every payday making sure that I have my cushion in the account for all of these automatic expenses before I feel like I have a lot of money.
I do the same thing with automatic savings, and it works well for us. You see, after all of the immediate expenses there is a little bit of money left over. I run a small business so that I can have that money left over, because it’s important. That money goes to medium and long-term savings.
The secret with those savings accounts is to treat them as expenses too, though. On the 1st or the 15th of every month, my bills get paid. This includes automatic withdrawals to pet care, medical care, and other long term expenses. Why set up automatic savings? When they feel like bills, I take them seriously. When they fill like extras, I am more liable to go off and spend the money on something immediate and fun, rather than saving for the future. This way, I ensure that I have enough money to meet some of those larger expenses instead of searching for it in a crisis.
Do you arrange for automatic savings from your account? How does it work for you?