Automate Your Finances

We had already mentioned that our first financial wake up call came from a 4th grader, but this next one comes from NY Times Bestselling Author Ramit Sethi, financial blogger and author of a new book called, “I Will Teach You To Be Rich”.

His book is great, and his blog is filled with a ton of valuable information, but the concept that really hit home for us was his discussion on willpower, and how it just doesn’t work for most of us.    

The Problem With Willpower

From Ramit’s blog post, he explains why people can’t rely on willpower alone to help them make better financial decisions:

“If you think about the 50+ money decisions you have to make today: Should you save more? What should you cut down on? What about investing — real estate or stocks or index funds? Pay off debt? Did you send in that Comcast bill on time? Is it time to rebalance your portfolio? – you’ll find that when you’re faced with an overwhelming number of choices, most people respond in the same way: They do nothing.”

His point here is that we struggle with willpower when it comes to our finances, because we simply have allowed ourselves to have too many financial decisions to make for ourselves in a given period of time.  If there were an effective way to remove the number of decisions we had to think of, we could need to make fewer decisions in total, and could more easily make the right ones.

His solution?  Financial Automation

Find a way to automate as much of your financial situation as possible, so that you can minimize the number financial decisions that rely on your willpower in the first place.

This is a great post, and it goes into detail about how to set up an Automated Financial structure for yourself, allowing you to unconsciously move forward in your financial goals.

Definitely worth a read.