We’re In Debt is holding a group writing project this week talking about savings and encouraging saving.
I’ve always been a little wary of making things automated. Ever since I had an automatic debit to AT&T for my phone bill that even though I canceled it, restarted itself and started billing me for the next people that had my old phone number (which got sorted out but was a huge pain) I’ve felt irrationally biased against anything automatic. That isn’t so say I don’t have anything on automatic debit ever, but it just makes me a little more nervous than it should.
That, combined with the fact that we’re still in debt, and that my spouse gets paid on an irregular schedule in respect to what day of the month he gets paid, has made me hesitant about putting our current savings objectives on automated debits. Which is silly, because something that is forcing us to save is not that same as a bill that may or may not be ours to pay. But hesitant I am, and I’m working on talking myself into setting up automated savings through my ING account.
Every month, I save only $75 right now (excluding the 401K contribution, which is automatically deducted from my spouse’s paycheck). I put $25 in each of my two children’s college funds, and $25 into my “long term” savings fund that will eventually form the base of savings for things like replacing our car and necessary home improvements. Not a whole lot of savings, and when we are out of non-mortgage debt, I will be upping all three of those as well as adding an emergency fund savings (our emergency fund is $1000 right now and already fully funded). And of course, if I set up automated savings now, I can change it in the future to reflect our new savings goals.
Which I guess is the key to the matter for me. I’m afraid that changing it will be difficult and it won’t work correctly and it will cause a huge mess. But that is silly – I am sure it will be fine and not hugely difficult to change once I want to increase them, but the irrational voice in my head says to hold off and wait until we’re saving the “goal” amount every month.
Even without an automated plan I have been consistently saving these amounts every month – I do like the hands-on-ness of doing it myself. But it would certainly be easier to have it done for me.
So what’s your experience? Do automated savings plans make saving easier for you? Do you end up saving more using methods such as these?