What you don’t see, you won’t spend. That’s the idea behind an automated withdrawal system, which takes money out of your checking account every month and puts it into a savings account. You can create multiple savings accounts, one for a 6-month emergency fund, and one for a down payment on your first sailboat (ok, maybe not a sailboat, but you get the idea). You could time it when you get your paycheck – and then register the adjusted amount. Start with 2%, and if it doesn’t crimp your style, move up from there.
There are some high earning savings accounts out there – ING Direct, for example, boasts a 1.5% annual percentage yield for its savings account versus 0.69% for a money market fund and 0.42% for a bank savings account. We love this the most: you can change the withdrawal amount and make transfers anytime via the Internet if you find yourself in a pinch. http://home.ingdirect.com/products/products.asp?s=OrangeSavingsAccount