“The art is not in making money, but in keeping it” – Proverb
Payday is one of my favourite days. Period. It’s when that glorious chunk of change auto-deposits into my chequing account, and just sits there ready to be spent. It’s a fantastic feeling.
But what do you do next? Do you succumb to temptation and spring for a new iPad or a one-way ticket to Honduras? Or do you begin distributing it to your various savings accounts and credit cards?
I do neither. I have it automated.
Virtually every bank offers this option. I sincerely believe in the ‘out of sight, out of mind’, pay-yourself-first philosophy, but, more than that, I just don’t trust myself. I have consistently under-saved or overspent simply because I gave myself the option on payday to choose where my money would go.
Now I’m by no means saying that you should live a miserable existence and pinch pennies to get by. We need to allow ourselves to have fun and spend money. My issue is that I was grossly overspending – and not necessarily deriving an equal amount of pleasure from it. Which is why, shortly after I became debt free, I resolved to set some goals and start automating my savings.
- As you know, I’m working towards my MBA. To keep on target, I have a savings account, goal tracker and $250-a-paycheque going into an auto-savings plan.
- With friends out of work, I’m also throwing $250 every payday into my TFSA Emergency Fund. Just in case.
- For the fun stuff like vacation, I have $75 coming off each paycheque into a Vacation Fund.
And that’s not including the 10% (and 7% employer match) coming off each paycheque and going into an RSP. Simple, huh? The leftover funds are spent cleaning up my VISA bill, enjoying some meals out, and padding my aptly-named ‘Miscellaneous’ Savings Account.
The best part is I don’t even feel it! Learning to live with less is as easy as 1-2-automate.