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Adding to your savings – preauthorized plans

Adding to your savings – preauthorized plans

March 14, 2013

Whether it’s giving in to impulse purchases or taking a vacation that you can’t afford, spending every cent you earn can stand in the way of a healthy financial future. Fortunately, a preauthorized savings plan can help stave off temptation and boost your savings. Here’s what you need to know about “forced savings” and how it can prepare you for tomorrow. 

Your money, your choice 

Just because you’ve arranged for automatic deductions and deposits doesn’t mean there’s no room for flexibility. Preauthorized plans can be contributed to weekly, bi-weekly, monthly, quarterly, semi-annually, or annually, depending on your savings needs. 

No last minute scrambling to save 

By choosing the amount you wish to contribute, there’s no more scrambling to squirrel away a few extra dollars here and there. When the same amount is automatically saved each week or each month, saving becomes easier, more convenient, and more disciplined. 

Take advantage of compounding 

Forget about timing your investment contributions based on what’s happening in the markets. When you save with a preauthorized contribution plan, you’re always saving and growing your money. And when the interest on your savings starts to earn even more interest, you benefit from the magic of compound interest. This “snowball” effect can do wonders for your bottom line over time. 

Start small and build 

Starting a preauthorized contribution plan doesn’t require a huge commitment. In fact, you can contribute as little as $25 a month to get started on an automatic savings plan that suits your lifestyle and savings goals. Better yet, you can raise or lower your contribution amount at a later time if your financial circumstances change. 

Save the date 

By selecting preferred payment dates, such as the first or last of the month, you can take better control of your finances. Now you can keep tabs on how much money is leaving your account on a monthly basis, and what you can – and cannot afford to spend – in order to meet your financial goals. 

Don’t waste time – save now 

The sooner you set up a preauthorized contribution plan, the sooner you can start saving. But the best part is the faster you commit to a plan, the more your investment will grow over time.