You don’t have to reinvent the wheel to be good with your money. I like to look in unlikely places for guidance. Ever notice how businesses and the government automate how you pay them on a regular basis?
Automation Model
If you haven’t noticed, this is how it works. The government automatically taxes a W-2 worker’s paycheck every pay period. Money is withheld for federal taxes, state taxes, etc. There’s never a paycheck missed.
Most employees don’t even notice it because it’s an automatic and regular deduction.
Businesses and subscription-based models do it the same way. They bill you every month in a consistent and predictable pattern. I’d venture to say it’s just become a part of most people’s monthly expenditures.
In both cases, the billing is automatic and pulled directly without the individual having to do anything. It’s part of the reason so many people have so many unused subscriptions. Canceling requires effort and action, and the Law of Inertia takes effect.
Both the government and businesses know that the easier they make it to pay them, the more money they will collect. Automation takes all the effort out of it and most people end up not even noticing.
Realistically, if it weren’t done this way, people would owe a bunch of money for their taxes at the end of the year they don’t have. And people wouldn’t make an effort to manually pay a subscription based service, costing businesses a lot of customers and revenue.
Applying This To Your Savings and Investments
You can use this same principle of automation to your own financial life. Simply follow the proven model others have created.
If you want to save more, set up your account to automatically contribute every pay period. The same applies to investing—decide how much you want to invest and make your contributions automatic.
After a few months, you won’t even notice the money has been reallocated, and you’ll learn to live on the new amount. Once this is set, you’re likely to keep it because you’re used to it, and changing it requires effort.
Most people leave things in place once they’re established.
Great Way to Win With Money
What I’ve learned over the years is that money is as much about behavior as the numbers, if not more so. People generally don’t do well with daily discipline and having to make too many decisions around money.
Setting up automations and letting time and compound interest work its magic is the way to victory. So copy what other successful people, businesses, and agencies have done, and make it automated.
