New to the Live Richer Challenge: Net Worth Edition? Learn more about it HERE.
Missed some of the Challenge tasks? Catch-up then come back…
Day 15: HERE: Finding Your Why
Day 16: HERE: 401(k) and IRA
Day 17: HERE: Are you on track?
Week 3: Maintaining Your Net Worth
Today’s Easy Financial Task: Learn why automation rocks and how to implement it.
How to rock this task:
- Automate the tasks you’ve done so far throughout this Challenge
Hey, hey there Dream Catcher!
You’ve made it to Day 18 of the LRC: Net Worth Edition.
Today, I want to let you in on my secret weapon for growing my net worth.
Automation is the secret that takes the flawed variable out of the equation when you’re managing money a.k.a. you.
Instead of having to remember to pay off debt or save, your money will be automatically put into the areas that you decide.
Using this tactic, you won’t have to make as many day to day decisions about your money.
Instead, you’ll put your plan in motion once and then sit back as:
- Your savings grows
- Your investments grow
- Your debt decreases
- Your net worth explodes
The first step to automating is pulling out your budget or Money List.
We discussed budgeting and your Money List on Day 8, so pull that out.
Here are a list of things you should automate:
Bills, bills, bills!
You need to automate your bills.
On your Money List (or budget) from Day 8, you should see a list of all of your bills.
Automate payments for the fixed bills that you can each month such as rent/mortgage, phone bill, etc.
For bills that you can’t automate each month or ones that fluctuate i.e. utilities that change every month, create a calendar date with yourself. This is a date each month that you sit down and pay bills such as the first of every month.
Your Savings and Investments
Every payday or once a month, set up an automatic transfer from your checking to savings account.
A rule of thumb is to save at least 20% of your paychecks.
In addition to your emergency savings, take advantage of your company’s 401k retirement plan if there’s one available and match your company’s contributions. This is another automatic transaction that can help your net worth grow before your eyes.
If you can’t match the contributions right away, no worries!
Work your way up to this amount.
Make it a goal to increase your contributions by a percentage or half a percentage as often as your company permits. Call up your human resources department whenever you have questions about your company’s 401k program. They work for you!
Trust me, the feeling of your savings and investments growing right under your nose automatically is one of the most gratifying feelings in the world.
Your Debt Payments
We talked about repaying debt on Day 8 of this Challenge as well.
We discussed the debt snowball method for repaying debt which is the way I crushed my student loan debt.
If you need a refresher on it, go here to Day 8 to learn about the method.
Today I want you to make sure that you’ve automated your debt repayment plan.
Remember, the snowball method is when:
- You make the minimum payments on all of your debt.
- You focus on your smallest debt first and concentrate any excess money (bonuses, tips, windfalls) to that one.
- When that’s paid off, you distribute the money that was going there along with any other money you have to the next debt with the lowest balance.
- You keep going until you’re debt free!
What you should automate as far as debt payments is at least the minimum payment for all of your debt. You can also set up a large automatic payment for the debt you’re focusing on right now.
Note: I recommend setting up a payment from your checking account and not saving your bank account number into the payment portal of your credit card company or lender.
You don’t want a creditor having access to your account. Instead, have your bank send them an automatic check each month.
Automation is the Bomb.com
The task today is to automate.
Don’t skip this step.
Head to your bank account and set up your automation today!
And tell your accountability partner when you’ve completed this task. Accountability partners -- ask your partner whether or not they’ve done the task.
Share what you’re doing today with your friends on Twitter!
Bonus: This is one of my favorite books, by my favorite, financial authors: The Automatic Millionaire by David Bach.
This quick read will help you to start to automate your way to a solid, financial future.
Find it here on Amazon: http://amzn.to/2Az9Z6Z
If you have any questions, hit the comments below or reach out to the other Dream Catchers in the Live Richer Facebook Forum.
Don’t forget to keep tabs on your accountability partner(s)!
Teamwork makes the dream work.
You can reach out to me here:
Facebook: The Budgetnista
Private Forum: Dream Catchers: LIVE RICHER
P.S. Don’t forget to get your free Live Richer Challenge: Net Worth Edition Starter Kit. GET IT HERE.
P.P.S. Here’s a copy of the Challenge Calendar. It’s a fun way to keep track of your progress.
Want to work through the Live Richer Challenge: Net Worth Edition in a workbook? It's part of a bestselling series!
Click the link below and get your copy.
What’s the Lisa Rule? If I would not advise Lisa to use a product or service, I won’t advise you to. YOU are my Lisa. I feel protective of you and your financial journey.
This book passes my Lisa Rule. Yes, I am an affiliate of Amazon, and I earn a commission off of referrals, but I would not recommend a product or service that I didn’t believe was helpful and useful.