My Best Personal Finance Tip of 2012

December 13, 2012 by Kyle
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Recently I stumbled onto a pretty neat and useful blog called Debt Round Up.com which is run be a smart dude named Grayson Bell. That’s such a cool name, isn’t it? But anyways, he’s putting together a resource at the end of December documenting a bunch of great personal finance advice from a big group of bloggers. Long story short, he was kind enough to let me join in. The round-up will aptly be called the Best Personal Finance Tips of 2012. Without further ado…here is my entry.

Make Savings Automatic

Several years ago on my blog, I wrote a post titled What My Dad Taught Me About Money, where I documented my Dad’s financial success and a few of his tidbits of wisdom. The one that really sticks out to me was his advice to “put away a little bit of money each month and try to make it automatic”. Meaning have a percentage of your paycheck go directly into your savings account or retirement account. Stay consistent with it and you’ll fairly quickly start to see the benefits of compounded interest.

By making your savings automatic you don’t miss the money, which in my opinion is the KEY reason why this works. If you have to spend time and energy transferring money every month there is a excellent chance you’re going to find an excuse not to do it.

To get back to my Dad, as a man in his late 20′s, he was able to save enough money to buy a tri-plex in Los Angeles in the late 1960′s. He lived in one unit and rented the other two units which paid his mortgage in full. As his tri-plex increased in value, he kept trading up until he owned a large apartment complex and several rental homes. The most amazing part? He did all of this on a teacher’s salary, and now lives very happily in retirement.

So the next time you’re in your bank ask them about your options. It will only take few minutes to set up. Time well spent if you ask my old man.

Do you already make your savings automatic? If so, has it helped you build your savings or emergency fund?

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LeslieKyleDC @ Young Adult MoneyHolly@ClubThriftyGrayson @ Debt Roundup Recent comment authors

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Grayson @ Debt Roundup

Thank you Kyle for adding me in the post. I appreciate it. You took one of my favorite tips, so I am going to have to use my back-up in the roundup. I will let you have it this time around! 😉

Holly@ClubThrifty

I also subscribe to this philosophy. Making it automatic makes it that much easier to save.

DC @ Young Adult Money

My automatic savings is through my Employee Stock Purchase Program. It takes out 10% and at the end of the six months they buy stock at a 15% discount. If the price has risen over the course of the six months, they will take the starting price (and still at a discount!). You can cash it out right away, which is nice…otherwise it wouldn’t be a great way to save.

Leslie

Making savings automatic was one of the first things I did when I started budgeting years ago. My regulard expenses are done this way as well. It goes a long way to making things easy and simple. If the work is taken out of your hands so to speak then you don’t even notice it and you don’t feel like you are at war with yourself over using the money for something else.

 
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