Can $100 Make a Difference?
“Wealth won quickly dwindles away, but gathered little by little, it grows” (Proverbs 13:11).
Little by Little
I recently sat down for lunch with a friend and business owner. She says she is unemployable by anyone else, because she has fully embraced owning her schedule and being in control. As a successful entrepreneur, massage therapist, and coach, she knows a thing or two about small things that make a big difference.
As we chatted, we began to discuss money and saving habits. She mentioned something too good not to share: From day one of her first job (in high school), she set up an auto-contribution of $100 per month into her savings account. Now, 10 to 15 years later, she still makes that contribution, and the account has grown to $18,000.
This account yields virtually no interest, as it is a regular savings account, so it is purely the effect of disciplined saving. Pretty, awesome right? (I did tell her she should move it to a high-interest savings account, so that money could make her more money.)
I had another wonderful conversation with a coach for young professionals in Texas who used to be a human resources (HR) professional. She took the auto contribution idea a step further, saying that her biggest recommendation is, from day 1, to distribute your paycheck into as many accounts as you need to be financially organized—for example, one contribution to your 401-K, another contribution to your “house account,” another contribution to your “fun account,” another contribution to your “giving account,” another contribution to your ROTH IRA account, and so on until you have all the buckets of your budget.
Pay Yourself Automatically
Neither of these examples may be a perfect fit for your situation, but they are examples of how to automate your saving and investing to ensure that they happen. When money is automatically taken out of your standard account, you are less likely to miss a month and less likely to spend that money.
Why do you think so many companies incentivize automatic bill pay? They know we are far less likely to miss a payment when it is automatic and not another item on our to-do list. Why not create the same automation when you pay yourself?
You may have heard the expression “Pay yourself first.” It refers to contributing to your retirement or other savings accounts as soon as you receive your paycheck. Paying yourself first increases the likelihood that you will be on track to hit all your financial goals, because there are fewer excuses not to. We all know that we are more likely to spend the money that’s sitting in our checking account than money we must manually move into our checking account.
Pay God First
Maybe, though, we should pay God first. I challenge you to look at your budget and spending habits. After all, knowing where your money is going is critical for your financial health. Are you able to automate your giving? Are you giving at the level you want to? Are you giving at the level God wants you to?
Like all the examples above, if we give first and automatically, we are far more likely to keep it up. “Out of sight, out of mind,” as they say.
I leave you with two action items for today (not tomorrow):
Automate your giving.
Automate your saving.
Be mindful and prayerful of how God may be calling you to give and save. Take out your phone (or wherever you keep your calendar), and add a reminder for three months from today to evaluate how you are doing. Can you give or save more? How are you preparing for the future God is calling you to? How are you supporting His kingdom right now?
May God be with you as you align your finances with His will!
Erica Mathews, CFP®, is a CERTIFIED FINANCIAL PLANNER™ Professional with Financial Counseling Associates, a small, family owned, independent, financial planning and investment management firm. She is passionate about helping families and individuals build their wealth so they can live out the calls God has places on their hearts. As a wife, mom of four, and businesswomen, she understands the complexities of family life and helps relieve the burden of financial stress with organization, a plan, and automation so her clients hit their goals. She lives in Colorado with her husband and four kids. They love everything outdoors including gardening, hiking, biking and simply exploring nature. If you would like to reach out to Erica, her email is erica@fca-inc.com