Automatic Transfers
BudgetingGlossary term
Definition
Scheduled recurring transfers from a checking account to savings, investment, or retirement accounts. Automating finances removes the temptation to skip saving and ensures consistency, supporting the pay yourself first philosophy.
Related terms
- Pay Yourself FirstA budgeting philosophy where you prioritize saving and investing by automatically directing a portion of income to savings before paying any other bills or expenses. This approach ensures saving happens consistently regardless of spending habits.
- Savings RateThe percentage of income that is saved or invested rather than spent. Calculated by dividing total savings by total income. A higher savings rate accelerates progress toward financial goals and financial independence.
- BudgetA financial plan that outlines expected income and expenses over a specific period. Creating and following a budget is essential for managing money and achieving financial goals.
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