Today’s Quick Tip – The Savings Sweep
At the end of each pay cycle, right before I receive a paycheck, I’ll do a savings sweep. I take a peak at my monthly budget, notice any categories where I might have “left over” money, and sweep that money from my checking account into my savings account.
Benefits of Today’s Tip -
- Savings account pays higher interest rate than does checking account.
- Money in savings account is harder to spend than money in checking account.
- This gives me one more chance to analyze and tweak my budget.
- I am motivated to live under-budget, so that my sweep amount can be maximized!
Bonus Tip -
If you are in debt, consider a payment sweep. Instead of sweeping “left over” money into savings, consider making an additional payment to one of your creditors.
I always keep a small amount in my checking account. This would be especially important for those living without free checking.