This isn’t a personal finance blog. But it is a blog about living productively, ambitiously and on purpose. And if there are any areas where most of us live just the opposite, it’s with our money.
So today, I’m sharing what has been the greatest personal finance choice I’ve ever made. [Outside of actually writing down a budget. If you don't have that...read no further and immediately create a written budget.]
Automate your personal finances.
Automating means taking something that normally requires ongoing attention and putting it on auto-pilot. Automation helps us do more, with less.
Managing money is one of the most energy sucking and detail oriented things we do. We all WANT to save, invest and spend wisely. But, if you battle this beast every week or month, armed only with your willpower, you’ll lose. Harvard Business Review notes the science of this -
The more conscious willpower we have to exert each day, the less energy we have left over to resist our brain’s primitive and powerful pull to instant gratification. According to one study, we spend at least one-quarter of each waking day just trying to resist our desires — often unsuccessfully.
It’s simple. The rewards of good financial choices aren’t immediate, so after a few rounds, we lose enthusiasm for the fight.
Automating avoids the fight.
When you automate the flow of money, your money comes in and goes where it’s supposed to, on schedule. All without your direct involvement. You will – -
Here’s how I automate my finances.
I don’t have to hope I have a little savings left, or force myself to make a good choice. The money left over after auto saving and investing is for basic bills and things to enjoy. Simple as that.
I’m funding my future, dreams and taking care of my family. One of the most tangible ways to do life big.
So how to do it?
Write out the sequence. What can you afford to do? What are priorities? Where do you need to focus? My example is not necessarily right for you. For example, you may choose to auto-pay down debt and invest less. But please invest and save something! Begin tracking your finances with a tool like Mint.com, so you can make reasonable estimates based on your past spending.
Consolidate your banking and investing accounts. I love having a dashboard of all my finances on one screen. This makes transfering money simple and you can setup the entire sequence in one phone call. I LOVE Charles Schwab. Their customer service is excellent. Their website is easy to navigate and their mobile app is the best.
Never again can you claim you’re “not a money person” or that this is too confusing. If you can type and click, you can take control.
If I can help explain this process further or answer any more questions, please feel free to contact me.
QUESTION: What changes do you need to make today, with your personal finances?