Setting up a separate bank account is one of the best ways to build an emergency fund, or save for a major purchase. But setting up that bank deposit account is only half the picture. In order to build your account over time, you need to put in new money on a regular basis. Using the pay-yourself-first model, and transferring money directly from your paycheck, are two ways to build those bank deposits.
Establish a household budget, if you haven't already done so. Make a list of all of your household bills, then add one more -- for your savings. The pay-yourself-first concept means treating your savings and investments as just another bill that must be paid. You can make this "bill" a small one if you wish, at least at the beginning. The most important thing is that you get started.
Track your spending on a regular basis, and compare your actual spending levels to what you predicted in your budget. Review your spending and look for places where you can cut back and save money. Allocate the money you save for your nest egg, and use it to increase the level of your bank deposits.
Set up direct deposit. Find the account number and routing number for the account you want to transfer money into. You can find these numbers on your check, or get them from your bank.
Contact your employer and obtain a direct deposit form. Determine what percentage of your paycheck, or what dollar amount, you want to dedicate to building your bank deposit. Enter the routing number and account number into the direct deposit form and submit it to your employer.
Set up regular transfers from your checking account to the account set up for your emergency fund, or other purpose. Use those transfers to build your emergency fund more quickly.
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