Direct Deposit: To Split or not to Split
Posted on October 16, 2010 by Kelly Griffie, One of Thousands of Money and Finance Coaches on Noomii.
Effective management of your direct deposit
In this day of direct deposit, it is rare to find someone that does not take advantage of this benefit. A 2009 study found that 66% of employees use direct deposit. However, significantly fewer than that use multiple accounts. Many companies allow you to deposit into multiple accounts, but only 23% actually split their deposits according to the same study. While there may likely be a variety of reasons why, let’s focus on the benefits of splitting.
Splitting your deposit into multiple accounts can be a great way to save automatically. When we commit to ourselves that after our expenses are paid we will move some money to our savings account, it sounds formidable, but usually does not materialize. Why? Mainly because by having extra money in our account, we tend to thing of things to buy, not reasons to save.
If you’ve created a budget, then you know how much you need for your expenses every month or every pay period. First, designate the amount needed for your expenses into your checking account. Next, designate the remaining amount to a savings account or multiple savings accounts, keeping in mind, no amount is too small. Remember, when saving, consistency is more important than the amount.
Using multiple accounts for direct deposit management can help you reach your goals sooner than you think!
