Managing Your Paycheck
Use Direct Deposit and pre-tax allocations to get more from your paycheck
You've worked hard for your money, and properly managing your paycheck can help ensure you get the most of it. From setting up pre-tax allocations to contributing to bank accounts using direct deposit, there are many things you can do to simplify money management, improve your budget and set aside savings. Check out these tips and start getting more from your paycheck today.
Set up direct deposit allocations to various bank accounts
Make saving automatic with split allocation between your savings and checking accounts. Splitting your direct deposit is easy and helps you keep to your budget while saving for the future. All you need is your bank's ABA or routing number, your savings and checking account numbers, and your bank's address. Obtain direct deposit forms from your employer and specify the amount you would like allocated to each account regularly. If your employer does not let you set up direct deposit for multiple bank accounts, you can set up automatic transfers from checking to savings instead.
Take advantage of pre-tax allocations
Many companies offer the ability to set up pre-tax allocations to cover various expenses. Find out if you can pay insurance premiums, contribute to an FSA (flexible spending account) for healthcare costs, cover commuting costs with TRIP (Transportation Reimbursement Incentive Program) for tax-free parking or transit costs. All of these payroll options can save money since they use pre-tax dollars. It's important to note that you should be cautious with an FSA or TRIP allocation as you must spend all the money allocated by the end of the year. You can often adjust TRIP allocations, but FSA will be locked in. You can also simplify payments to your gym if your company has a discount program established, though this won’t be taken out before taxes.
Contribute to a retirement plan or personal IRA
Another way to save now is to contribute to a retirement plan, like a 401(k), from your paycheck and set up automatic transfers to your IRA or individual retirement account after the direct deposit enters your checking account. Many employers offer 50- or 100 percent matching 401(k) or retirement plan contributions, which are tax-deferred until you withdraw the funds in retirement. Talk to your human resources department to find out how much of your allocation they will match. You can also save on your own with an IRA. IRAs are bank accounts designed to help you save tax-deferred until retirement. They can be used as a supplement to, or replacement for a 401(k) benefit plan. A Citizens Bank Retirement Services member can help you determine if a traditional or Roth IRA is best for your situation.
Manage your paycheck with Online Banking
Enroll in Online Banking from Citizens Bank to make automatic payments and transfers from your checking account. This can help you stay on track so you're only spending what you allocated in your budget. Managing your paycheck with direct deposit, pre-tax allocations and automatic payments helps you get more out of it for saving and discretionary spending. You can even open an interest-bearing bank account to increase your earnings even more. Speak to a Citizens Bank representative to learn more about our available bank accounts and services.