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Setup a separate savings account

Whether you’re just getting started with building a savings fund or you’ve been doing it for some time, I strongly recommend having a separate savings account set up so you can keep funds from mixing. Many financial institutions, including Consumers Credit Union (CCU), allow members (or customers) to open several accounts aside from your primary checking or savings. Take some time to determine the type of savings account that provides a strong yield so you can earn the most interest, but also take note of any features offered.

One feature I look for to stay disciplined while saving is a withdrawal limit when pulling money from the account, which discourages me from tapping into those funds I’m attempting to keep separate. This is a feature available at CCU with our Smart Saver account – missing out on the higher dividend for that month gives me a reason to not tap into that account. Finally, having funds available is important should an unforeseen event come up – whether it’s a medical issue, car repairs or anything that life throws at me.  

Set it and forget it

Use automatic transfers into your separate savings account(s). Depending on how your personal cash flows, I usually look for automatic transfers on paydays. This way, on the day the paycheck is deposited into my primary checking account an automatic transfer takes place, moving the funds into a separate savings account. At some employers, you may be able to set up a fixed dollar amount from every paycheck to go directly to your savings account, with the remainder going to your primary checking. (Check with your employer’s human resource department for this option.) That way, it doesn’t even show up in your checking account – out of sight, out of mind!

Follow-through on commitments

Whether you are using automatic transfers or moving the money yourself, the important thing is following through on your commitment to saving. For most people, it takes one to three months of consistent behavior to build a habit, and the more you allow any slips to happen, the easier it is to let yourself off the hook. Remember to stay committed until this becomes part of your normal behavior.

Celebrate the wins – even the small ones

Creating fun and excitement is a great way to make the behavior stick. Keep your reward within reason, but make sure you treat yourself for achieving milestones. As an example, think of doing something small for yourself after making your first three deposits or crossing a major dollar threshold (e.g., $50/$250/$1,000 etc.).