Where does all our money go? It’s a constant mystery for many of us who, no matter how much we’re earning at a given time, manage to put our money everywhere but a secure savings account. But some of the best solutions involve a disappearing act—all it takes is some planning and paperwork.
Hold It Hostage and Avoid Human Contact
Having your primary checking and savings accounts at the same bank, linked one on top of the other in your online interface, is what leads many down the path of temptation. If you see it, you’ll want to spend it. Open a savings account at a different bank, but don’t set up online banking. Cut your card up as soon as it arrives—or ask them not to send you one at all. Set up an automatic recurring payment to the marooned account. The inconvenience of having to drag yourself to a physical bank and speak with a teller IRL will deter you from withdrawals. Think of it like a banking Bermuda Triangle: Plenty goes in, none comes out. (Until you want it to, that is.)
Make Uncle Sam the Safeguard
On your W-4 tax form at work, indicate a reasonable, but ambitious, amount you want withheld from each paycheck. The government will hold onto it for you until tax season when you’ll see those deferments resurface as a rebate. When you do your taxes, have that refund direct deposited straight to the Bermuda Triangle account.
Trap Your Cash. Don’t Settle for Peanuts.
Putting your money into a certificate of deposit, or CD, is a solid option if you have enough to meet the minimum requirements. But opt for a credit union over a big bank, as the larger institutions have abysmal rates in comparison. Your money gets locked away for a fixed term—anywhere from one month to five years—and accrues greater rates of return than the crumbs you’ll earn from a regular savings account. Also, you can’t withdraw from a CD before it reaches maturity without incurring fees. Think of it like the marshmallow test of financial responsibility: You delay the gratification of spending your savings but end up with more money because you waited. When the CD does come to term, reinvest it in another one or shuttle it off to the Bermuda Triangle.
Prepay Your Way Through Your Life
Instead of relying on your debit card for most of your spending, figure out your budget for the month and load it onto a prepaid MasterCard or Visa gift card. Then leave your debit card at home. This will train you to spend within your means, especially if you start to think of your debit card as the “in case of emergency, break glass” option. Whatever is in your debit account at the end of the month goes—you guessed it—directly to the Bermuda Triangle.