In addition to investing in a 401(k) plan, I put money into a Roth IRA, another tax-advantaged retirement savings account.
My old system for adding to my Roth was inconsistent and inefficient: I simply contributed whatever money I had left over at the end of each month. To keep from brushing aside these contributions, I set up a recurring transfer from my checking account to my Roth. Now, the first day of every month, $200 automatically gets sent to the account. I never even see that $200, meaning I don't have the chance to spend it.
I set up a similar recurring transfer to my high-yield savings account, which I use to save for bigger, future purchases, such as a home, car and vacations. Again, the first day of every month, $500 moves over there.
By making things automatic, I've essentially finagled my budget so that my savings goals are a fixed cost. I treat the $200 for my Roth and the $500 for my savings account like I would rent or utilities — I have to set it aside every month — and that keeps me from skimping.
Putting my finances on auto-pilot has saved me time and stress. Besides checking in on my accounts once a week to make sure things are running smoothly, I barely think, let alone worry, about bills and savings goals.
Of course, when the new year rolls around, or anytime I get a raise or bonus, I'll reconsider my savings goals and adjust appropriately. But for now, I'm relaxed and enjoying life on cruise control.
My dad's gift-giving tradition taught me a money lesson that forever changed the way I spend