When I was talking to one of my coworkers the other day about something totally unrelated, she mentioned that she has her paycheck split between two accounts: her checking and savings.
What? I didn’t know that was possible!
I knew that, of course, if I wanted to participate in our 403(b) plan (which I don’t) that payroll would skim the money off of my pre-tax pay, but I didn’t know I could split the actual direct deposit between more than one account.
It’s no secret that I’m not a good saver. One of the reasons I’ve favored paying off debt over saving (so far) on my personal fiance journey is that I’m just not good at saving, but I’ve gotten pretty good at paying off debt. I think this is because I’m a natural spender, and paying off debt is, in a way, spending. You’re spending the money on something responsible, but you’re not holding the money, either.
Anyway, this piece of information got my wheels turning. See, I’m at a point where I really want to start saving, but I just don’t trust myself to be disciplined and actually keep the money in savings, so that’s why I’ve focused on paying off my car. But I think I’ve found a way that I can focus on both.
I really only need three big extra “chunks” of money to get my car paid off, and I know where they’re coming from: my reader money (coming in July) and my next two “extra” paychecks, one of which is coming this September and the next of which is coming in March, 2012. So actually, on a month-to-month basis, I don’t really need to worry about paying off my car from here on out.
So what I’m thinking I’ll do is this: split my paychecks so that $200 comes straight off of each and goes into my Roth – thereby maxing it out from 2012 on – and the rest goes into my checking account. Apply my next three large “chunks” of money to my car to get that paid off by March, and apply all extra funds (birthday money, tutoring money, extra paychecks after March) to my Freedom Fund.
I like this plan because I know that I’m basically tricking myself into saving, and I’ll be saving a decent amount of money at that. I also have a very manageable way of getting my car paid off – actually, it’ll be paid down to only about $1,500 by year’s end.
What do you think of this approach?