Last fall, my husband and I got a mini-windfall—a couple hundred bucks sent to us each month as repayment on a loan. Naturally, we vowed to save every dime.
Naturally, we didn’t. We spent it.
Meanwhile, over at the Money Magazine offices, where I’m a contributor, I’ve been doing mondo research on saving behavior (stay tuned for the March issue).
Our failure is typical, economists say: Humans are reluctant to part with their cash when they don’t get an immediate gain (say, a sweater or a cheeseburger).
In order to save consistently and steadily—and reach your goals—you have to take matters OUT of your own hands.
So I took five minutes this morning to log on to my Fidelity account, and have our windfall money transferred to our Roth IRA, automatically every month.
That added tens of thousands to our net worth right there. If we continued saving the same amount, even after the loan is repaid, we’d be $471,000 richer. (I used this calculator.)
How can you improve your saving strategy today, in five minutes or less?
Increase retirement contributions by even $25 per month? $50? C’mon. Set up an automatic transfer to your emergency fund? Another goal? Do a savings sweep, now that you’ve paid some monthly bills?
5, 4, 3, 2... Tell us what you saved—and how much it’s going to add to your net worth.
photo source: Pepponi's shop on etsy
Don't Blow Your Windfall Comments
- By MP Dunleavey
- February 02, 2011
Tagged in: Saving