10 Rules: Save It Automatically

December 23rd, 2006  |  Published in Retirement  |  1 Comment

The only way to guarantee that something happens regularly is if you make it automatic (duh!) and that’s the focus of this sixth tip of Forbes ten rules for building wealth: make saving automatic. This is the premise of David Bach’s The Automatic Millionaire and it’s definitely a tip that, twenty years from now, you probably will have wished you followed (so stop reading, go make your savings plan and retirement plans automagic).

How can you make it automatic? Many banks have the capability to setup a recurring transfer, say a hundred bucks each month to a high yield savings account; so if you set something up like that, before you know it you’ll be sitting on a nice hefty chunk of change “for free.” Another option is to ask your company’s payroll department to split your direct deposit and this is something a lot of companies do offer, usually a maximum of two, so that’s another option to consider. Either way, if you make it automatic, you can guarantee that it’ll get done each month. (If that’s not a Yogi-ism, I don’t know what is)

Source: Fortune

  

Responses

  1. Terry says:

    December 24th, 2006 at 2:51 am (#)

    I tried that once. Unfortunately, once the money automatically went into my savings account, I didn’t have enough money to pay all my bills, so I let my utility bills slide. After several months, I started getting shutoff notices, so I stopped the automatic transfer, took the money I had “paid myself”, brought my utility bills current, and quit trying to automatically pay myself first. It’s hard to make that work on minimum wage.