Making Saving Automatic Leads to Personal Success
Ryan’s savings journey started when he was an active duty airman. Frequent deployments and temporary duty assignments gave him the opportunity to save. By the time he transitioned out of active duty, he had built up a healthy rainy-day fund and had started to aggressively save for retirement.
Ryan’s interest in personal finance led him to start an influential blog, the Military Wallet. Now he has a podcast, a newsletter, and a more general personal finance website, Cash Money Life. He attributes his financial successes to one thing: making savings a habit.
“The best savings tip I have is to make savings automatic,” says Ryan. “Setting up an automatic transfer from your paycheck or your checking account ensures you will always have something going towards your savings. After a while, you won't miss the money you are saving, and it adds up quickly.”
Once someone has reached their initial goal, continues Ryan, they shouldn’t stop: instead, they should work on other savings goals, such as a down payment for a house or car, saving for education, or investing for retirement.
Goal setting is an important aspect of saving: research has shown that those with a plan are twice as likely to be successful at saving. The Military Saves Pledge is the first step in creating a personal spending plan.
While he started with a modest goal of building an emergency savings fund of $1,000, Ryan then continued by saving several months of living expenses and moved on from there.
Ryan stresses that all these goals can be reached through automating savings, which just means setting up an automatic transfer of money from your paycheck or your checking account each month. Ideally, the money should be kept in a separate, FDIC-insured bank account or other investment account.
His emergency savings came in handy when Ryan transitioned out of the Air Force and into the inactive reserves before entering the Air National Guard. He now maxes out his IRA contributions each year and contributes to his employer’s 401(k) program.
Another factor in Ryan’s success is that he and his wife were able to have candid conversations about money and shared the same savings goals, so they both made it a priority to automatically set aside a portion of their paychecks each month.
Having common family goals and open lines of communication increase the chances of savings success.
Ryan believes that with a little effort, savings can become an ingrained habit.
“The hardest part is getting started. But once you set it up, it’s easier to maintain than it is to stop it. And the results speak for themselves!”
Want to receive motivation and inspiration to save? Take the Military Saves Pledge today, and visit militarysaves.org for more tips and resources.
- Category: Saver Stories