Savings Pledge Stories: Surviving and Thriving on Automating the Savings

Here's my recommendation for anyone who wants to save: Automate it. That can be through direct deposit of a portion of your paycheck or, if you're self-employed like me, through a monthly bank deduction.

I had been saving $400 a month, and wanted to save more. For some reason, though, I was fixated on doing it in $100 increments. Going from $400 to $500 sounded scary to me, especially since my health insurance premium just leapt another $76 per month.

Then along came the Savings Pledge, which made me take a second look at savings: Why not make it $100 a week/$5,200 a year, vs. $400 a month/$4,800 a year?

Technically that works out to $433.33 per month. That just sounded silly, so I made it $435.

Having a savings account is very important to me. I'm single and I'm a freelance writer; I don't have a partner with a day job (or health insurance) to rely on in case things go south. I'd love to have a year's worth of expenses banked, and to have a home of my own some day. It's up to me to make these things happen. Automating the savings means that it will happen, month by month.

Since I know the money's coming out of the account in the middle of every month (right after I pay any credit-card bills, and a couple of weeks before my rent is due), I keep a weather eye on my spending. To me, that's the great thing about automated savings: Whether you're taking out $5 a week or $500 a month, you learn to live on what's left.

Best-case scenario: You get so good at this that there's money left in checking after all the bills are paid and the automatic savings withdrawn. After a few months you might realize that you could save $10 a week or $600 a month and still meet all your obligations.

The word "empowering" has become a cliché. But knowing that you can meet your immediate needs and save for future goals is pretty powerful stuff.

They say that a goal is "a dream with a deadline." What are your goals? Building an emergency fund, paying cash for your next car, buying a home of your own, helping a child through college, saving for retirement? Join us in taking the Savings Pledge, and set your dreams in motion.

DealPro Donna Freedman writes the Living With Less personal finance column for MSN Money, contributes every Friday to MSN Money's Smart Spending blog and writes her own blog, Surviving and Thriving.