When it comes to creating healthy financial habits, one of the best things you can do is automate. With the many technical advances made in the finance industry, automating your way to financial freedom is easier now than it ever has been.
Whether you want to budget, save, and/or invest, I often use the phase "it is not rocket science, but it does require discipline." There are so many temptations and distractions that tries to keep us from being great and staying on course to obtaining our financial goals. A cheat code to help you stay discipline with your finances is to automate.
Below are a few things you can automate to help you achieve your financial goals.
Savings - Open a saving account and have a portion of your paycheck automatically deposited into your saving account. Most employers allows you to deposit your paycheck to multiple accounts.
Bills Only Account - Open a checking account and have a portion of your paycheck automatically deposited into your bills only account. This account is used to pay for your bills (e.g. rent/mortgage, car note, cell phone, utilities, etc.).
Contribution to Retirement Account(s) - You probably do not plan to work your entire life, so it important to start saving for retirement as soon as possible. Time is your greatest asset when it comes to saving. If your employer has a retirement plan, take advantage of any matching incentives and contribute to your retirement account. The most important thing to do is to start contributing, no matter how little you can contribute at the time. Start off with contributing 1%, and increase your contributions over time. Just start!!!
Investment Account - When you are ready to start investing in the market, open an investment account (recommend opening an account at Vanguard for their low fees and great investment options) and automatically contribute to your investment account. Once you have your account open, we recommend starting out with investing in exchange traded funds (ETFs) and implementing a dollar cost averaging strategy
529 Account - If you are a parent, it is never to late to start saving for your child's college education. 529 account is a good vehicle to save for your child's future. It offers some tax advantages. Furthermore, you can request family and friends to gift contributions to your child's 529 account for birthdays and holidays instead of toys. Set up a 529 account for your children and automatically contribute to their account.
We realize the importance of having healthy financial habits, that is why Financial Freedom is one our core values. We started out pooling our funds together and created an investment club to learn and invest in the stock market. The discipline of contributing to the investment account every month and investing into the market yielded dividends many time over. The key to our success was automation!