Getting your financial act together seems to be a popular new years resolution. However, for whatever reason a lot of people don’t seem to follow up on their resolutions, mostly because habits, attitudes and beliefs can get in the way. So if you want a quick and dirty way to help yourself achieve your financial goals, go automatic.
By automatic, I mean configure your accounts so you automatically move your money around. For example if you’re trying to save up $500, set up an automatic deposit from your checking account to your savings account. If you want to make more money in the stock market, go ahead and get your brokerage account set up so it automatically debits from your checking account, or automatically reinvests dividends.
The value in doing this is you…
a. have more time
b. are forced to do it
c. don’t have to think about it
d. remove opportunities for derailing your goals
Automating your accounts totally works. Back in 2006 my wife set up her Roth IRA starting with $25 dollars per pay period. Now that account has $65,000 in it. This isn’t all from direct deposits, but it helped my wife to start small and move on to bigger investments.
Finally, if you want more details on how to actually do this, check out the following video by Ramit Sethi.