I have spoken about many things that may keep people up at night regarding their finances: making sure there is enough money, outpacing inflation so your money extends far enough. The financial concerns can seem endless. Putting savings on autopilot is a great way to know you are saving and preparing for emergencies and the future.
The first milestone you will want to reach with your savings is the establishment of an adequate emergency fund. With an automatic transfer from your checking account to your savings account, you will be able to reach this milestone in no time and can start saving for other things. 50/20/30 budgeting approach utilizes 20% of your net income for future goal achievement. Automatically moving the money upon paycheck receipt will create a habit and help to adjust daily spending without that money.
An important part of your savings plan is to make sure that you know the purpose of your savings. Once you have your emergency fund set, you can start to distribute your savings to other funds. Using the 50/20/30 and a plan to define goals, you will be able to move money into the proper vehicles necessary for future use. Once you have your emergency fund set, you can start to distribute your savings to other funds.
The funds building after the emergency fund will be designed for longer term goal achievement. Having automatic funding and automatic investing provides long term growth with confidence. Making it as easy as possible may help deliver quicker and greater success. An easy option for automatic building is the Guided Wealth Portfolio option. GWP will accept automatic deposits and automatically master investment allocations giving the client confidence that their money is continually working for them.
The need for saving on automatic pilot is strong. As one addresses their finances, they need to not only be responsible with todays concerns but also save for future. Setting up an automatic savings plan assists with knowing you are preparing for your future needs all the time.
Helen Hartman is a Investment Advisor Representative at Redwood Financial Network in Solon,OH.