Financial Planning: Set Up Automatic Savings

Do you often find yourself asking at the end of every month (or heck, even every week!), "Where'd all my money go? With the shaky economy and folks losing jobs everywhere, it's more important than ever to create a budget (and stick to it!). It's just as important to start stashing away an emergency fund, just in case. But if you try and wait until the end of every month to set money aside—after all the bill-paying and other little demands that arise as a parent—all you'll see is yet another place for your money to go. The easiest way to save? Don't even think about it.

Here's how to start saving on autopilot:

• Contact your bank. If you have direct deposit of your paychecks, set up an automated withdrawal, where a portion of that deposit goes directly into a savings account instead of your checking account.
  
  
• Start small. It doesn't have to be a big chunk of your check. Start slowly, say, maybe $25 to $50 of each paycheck. (That's one trashy magazine less a week!)
  
  
• Work your way up. As you start to get a handle on your budget, the more ambitious you can get with the amount. Do I hear $100? $200 even? The more money you start tucking away now, the bigger your nest egg.
  
  
• Set a six-month goal. No matter what level of job you or your partner have, or even if either of you own your own business, the ultimate emergency fund is to allow you and your family to live on for at least half a year. Aim for saving six months worth of living expenses.
  
  
• Check in. But don't dip in! Of course, you'll want to check your statements every few months or so to see your progress. But no matter how tough the temptation, don't withdraw any of those funds! The goal is to keep this savings account growing.
  

The takeaway: If you set up an automated savings account, you can start building an emergency fund without even lifting a finger. What you don't see, you won't spend. Even when I've faced the toughest of times, I've managed to keep my savings account growing. How? Because I knew the savings was automatic and kept the funds off limits.

Get more financial advice from our personal finance expert, Carmen Wong Ulrich!