Whether you just joined the public workforce or have been a public employee for years, one of the best ways to attain financial freedom is by racking up your savings. You need to learn how to live within your means and put aside some money every month. Simple right? Not quite!
An average of 40% of Americans would have a hard time coming up with $400 for emergencies (1). How can you make sure you are not part of that statistic? It all boils down to one simple thing; automating your savings.
Top 5 Benefits of Putting Your Savings on Autopilot
1 – It eliminates human error
One of the reasons why people don’t save is because they simply forget to. Think about it, when you receive money, your first instinct is to pay off your debts and clear the bills. Transferring money from the checking account to the savings account is often not a priority and when you have to do it every month, it becomes easily neglectable.
2 – You’ll avoid the temptation to spend
It’s so easy to spend money when you have it with you. For instance, if you have $300 leftover after you’ve paid all the expenses, you may find yourself spending it on something fun instead of saving it. If you, however, have that money tucked away in a savings account, you will have zero temptation to spend it.
3 – It makes achieving financial goals easier
If you have a goal of saving $10,000 in a year, you can easily calculate the amount of money you should put aside every month and then automate it. The automation process instills a financial discipline that increases your chances of successfully achieving your goals.
You could also create a retirement plan with the CalPATH Home Loan Program by utilizing your home mortgage as a wealth-building tool.
4 – It provides you with a safety net
Unexpected expenses come up once in a while but what happens when you have an actual emergency that requires a tidy sum of money? Automating your savings ensures you have money put away that you can either use in case of emergencies or use for investments. It is also a great way to increase your retirement savings.
5 – It forces you to live within your means
The out of mind out of sight theory works pretty well when it comes to financial planning. You cannot save money that you don’t have so you will be forced to spend the money you do have responsibly.
When you automate your savings, you have to find creative ways of ensuring the money left gets you through the month e.g, by slashing your expenses, delaying unimportant purchases, eliminating impulse buying, etc.
Benefits of Automating Your Savings
The beauty of automating your expenses is that when you have any money left over, you can comfortably splurge. It also saves you time from coordinating the payments and handling paperwork, giving you more time to focus on your other investments.
About Mountain West Financial and the CalPATH Home Loan Program
Mountain West Financial is the exclusive lender offering CalPATH, the #1 home loan program for Teachers, Police Officers, Firefighters, and other public employees who serve our local California communities.
You may contact our CalPATH Hotline @ 800-310-7577, seven days a week from (8:30 am to 8:00 pm). A CalPATH advisor will be standing by to answer (any & all) questions you may have about the home buying or refinance process.
We look forward to working with you soon!
Joe Moore – Branch Manager
Links to sources used
- Many Americans who can’t afford a $400 emergency blame debt – https://www.cnbc.com/2019/07/20/heres-why-so-many-americans-cant-handle-a-400-unexpected-expense.html