Payroll Deduction–Forced Savings

They say you can’t spend what you don’t have….  Well this technique can help people that have the cash flow but can’t seem to save or pay down debt like they would like to.  If you get your check automatically deposited in your bank account, you can arrange that a certain amount can be taken out of each check and directed to another account.  Now if your goal is to create an emergency fund or savings for a vacation this works great.  If your goal is to pay down debt, the D2D Calendar ($24.95 per year, or free with yearly membership) works ideally for this.  But if you don’t have that or it still doesn’t control your spending and you have the cash flow but it never seems to get directed according to your plan, then this technique is the next step if you are serious to meet your financial goals/plan.  What you want to do is first figure out your Cash Flow (Income-Expenses, also found on Financial Statement($19.95  or free with yearly membership) , then divide by 2(if you get paid bi-weekly), you are now going to make that your payroll deduction amount, ie if your cash flow is $800 and you get paid bi-weekly, then you  your payroll deduction would be $400.   Does anyone do this currently and how does it work for you?

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~ by debt2dreams on January 14, 2009.

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