Tue, April 07, 2009 - 7:00:58

Saving?  It’s Automatic.

As we continue our week-long celebration of Financial Literacy Month, we know you’re probably all wondering how THE POWER OF SMALL can help you save and invest your money.  And the answer is, well, automatic.

As personal finance blogger and author of the new book I Will Teach You to Be Rich, Ramit Sethi writes in a recent post, “Personal finance is not about willpower.” Instead, Sethi argues that the best way to manage your finances is to set them up to grow effortlessly.

We couldn’t agree more.  THE POWER OF SMALL philosophy is all about taking on the tough challenges one manageable step at a time and nowhere is this more important than when dealing with your long term financial goals.  Saving $1 million for your retirement or setting aside enough money for a six month emergency fund can feel like an impossible goal, but with the simple change of automating your investing strategy, you can slowly but surely meet it.

So, instead of consciously trying to put aside a set amount of money into your savings and retirement accounts, make it automatic. When you calculate your monthly budget, act as though the amount of money that you will automatically deposit into those accounts is not a part of your income.  Start with a small sum at first and week-by-week, gradually increase the amount you save by just $10.  Without even noticing it, you will adjust to your new income level and smile every time you check your ever-growing savings accounts.

Are you an automatic saver or do you prefer to consciously invest each month?  We’re talking about it on Twitter today, so come join the conversation @ThePowerOfSmall.

Posted by Linda and Robin