Guest post by Brandi Bernazzani

Have you always wanted to be a saver but could never find the extra money?

If that describes you or your family, you are the RULE and not the exception in America. Most people pay their major bills first and then spend as they need to and want to. For the most part, unless people are in the habit of saving, they spend what’s in their account and sometimes more, regardless of how much they make.

If the idea of savings makes you cringe you’ve got to put a plan in place that automates the savings and removes the money from “your fingers” before you get a chance to find it a new home.

Here’s the solution in 3 easy steps:

1. Go to the web and find a reputable online savings account that offers these benefits and set up a new account:

a. No fees to open or maintain an account
b. No minimum deposit amount or account value to keep from paying fees
c. Interest on savings of > 1%
d. FDIC insured
e. Easily able to open multiple accounts
f. A company you’ve heard of or one that is well established
(My favorite is ingdirect.com’s Orange Savings Account)

Once you have opened the account, nickname it “Cushion”. Then commit to not touching it, think of it as money that is untouchable. This part is really important.

2. Determine a rough estimate of how much you could realistically save per month.
An easy way to do this is to go through at least 2 months worth of past spending. Make sure to add in items (as if you spent on them monthly) that you pay once or twice a year like property tax or insurance. Most working families in the bay area can reasonably save $500 to $1k per month but you’ll have to determine what you can do. Remember, even $10 a month or $100 a month is better than $0 a month. Start with an amount you know will make you successful.

3. Next, set up an auto transfer (at ingdirect.com) from your checking account (where you receive your direct deposit) to your Cushion Account, for the total that you’ve chosen to save each month. Make sure the transfer is set up to take place a few days after you are paid each month. You are also welcome to break up the savings into as many times a month as you are paid. That is up to you.

Once you’ve set up the auto savings, carefully monitor your spending to make sure you spend less than is in your checking account. The first couple of months you may miss the $ that has been saved, but soon you won’t even notice and you will have adjusted your spending. It’s likely the amount you see accumulating in your Cushion account won’t be exciting until you have at least $5K or $10K. However, at some point, you are going to become motivated to add to your savings and before you know it, you might even become a Savings Evangelist. Pass on this article, share the idea with friends, and break the Financial Silence. Make savings a new habit that is hard to break!

For more information, contact Brandi Bernazzani at (415) 664-5884

San Francisco based Financial Planner with Scalisi & Bernazzani Financial Services, LLC
Building a Roadmap to your Financial Success

Photo credit: LotusMonger