Money Talk

Benefits of Auto-Deposit

There’s a way to ease the struggle, save time and money, and still have cash leftover to spend on wine.

It’s natural to assume that the best things in life take work. But when it comes to being financially successful, working less is key. That’s why we love automatic investing.

Save and invest, and save and invest. This set of instructions is simple on the surface but turns out to be more challenging in reality. Saving money is hard. Taking the extra step and investing that money is somehow harder.

There’s a way to ease the struggle, save time and money, and still have cash leftover to spend on wine.

The trick? Automatic investing.

Take it from finance expert Ramit Sethi, creator of I Will Teach You To Be Rich. He spends a total of less than an hour a month on his personal finances by automating them. Every month, Ramit’s money is automatically deposited into his investment accounts, savings accounts, and checking account, which helps cover bills and fun money.

His money is automatically divided into the right accounts. So not only does he not have to think twice about putting money away, he also doesn’t have to think about spending any money that may be leftover. He doesn’t advocate living a painfully frugal life. Instead, he advises, “Spend extravagantly on the things you love, and cut costs mercilessly on the things you don’t.”

Saving and investing more doesn’t have to mean cutting the things you love out of your life. On the contrary, one of the main reasons we invest is to buy things we love.

This Will Be Quick & Painless

First off, automating cash toward your investment accounts is the easiest way to achieve your financial goals faster without putting in any extra effort. You’ll be surprised at how painlessly you can save your first $1,000 – and excited when you realize that yes, you can still buy that tablet you’ve been eyeing afterward.

Second, automatic investing holds you accountable for your investments. You no longer have the option of not saving money. The deed is being done before you can protest otherwise.

And third, automatic investing keeps you calm.

Don’t Stay in A Traffic Jam

When it comes to money, it’s natural to get emotional. Money is important and allusive, which is why it can be terrifying when you see the stock market dipping. Without automatic investing, you might make a snap decision and decide to stop investing out of fear.

But by automating your finances, you’re compelled to stick to your original investing method (passive investing for the win) and get over the stock market slump. Since you know the stock market has a long and reliable history of increasing over time, you understand from the get-go that consistently investing is the optimal choice.

Think about it. If there was a traffic jam on the way to work, you wouldn’t pull over to the side of the road and say, “Well, I better stop here!” You’d keep going, because a minor hiccup doesn’t make your end goal less important – or attainable.

Bottom Line

Saving and investing money isn’t about cutting out your morning Starbucks or refusing to travel. Simplify your money methods by automating your plan.

Photo by Hannes Wolf on Unsplash