The Savings Sweep – Today’s Quick Tip

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.

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7 Responses to The Savings Sweep – Today’s Quick Tip

  1. “Savings Sweep”. I like that. I do the same thing at the end of the month, I just didn’t have a name for it. Now I do..:)

  2. Doctor S says:

    I really like this tip and I do use it at the beginning of every pay cycle, once my paycheck has cleared into my account. I subtract all my fixed costs, leave $10 in there for Powerball and move the rest to my ING. I call this my “Get that money the F outta there and into my ING” method. Gotta keep it interesting right? I am sure @SingleGuyMoney will have a good name for it soon.

    I am digging the quick tips!

  3. oneadvice says:

    I love the savings sweep ;)
    I think i might aim for this at the end of July (although it might be more of a payment sweep… but still a good idea!) – never done it before but your posts are so inspiring.
    Keep up the good work.

  4. This is an excellent concept, however if you get really good with your budget you can transfer these funds when you get paid and take advantage of the interest that would be generated in whatever savings vehicle you transfer the funds to. By doing so, you are also truly Paying Yourself First! Either way, do the savings sweep so you don’t spend the extra money on junk!

  5. Brad says:

    I really like this idea! There have been times when we almost did this but since we didn’t “sweep” it into our savings account we ended up spending it on something else.

  6. First Knight says:

    Interesting idea! I actually scheduled automatic monthly transfer to savings to make sure that I save every month:)

  7. Helen says:

    Like this idea…will be putting this into practice…first toward paying off our mastercard and then into savings it will go. Love your site.