Pay yourself first. Before spending on entertainment, before groceries, before bills and rent — contribute to your investment accounts.
Automating your investments means you'll never get a chance to spend your savings. What can you automate?
- 401k, ESPP, HSA — fill out an HR form with your employer and they'll automatically deduct the amount out of your paycheck, perfect!
- Taxable Investment Account — setup recurring investments via your brokerage's website.
Unfortunately for Roth IRAs, if you're over the income limit you'll need to use the backdoor strategy which can't be fully automated. It may be best to set a calendar reminder to make your annual contribution as early in the year as possible.
Learn more from Get Rich Slowly: Pay Yourself First.
Related Tips
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Max Out Your 401k Take advantage of employer match and tax savings
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Max Out Your Roth IRA Save additional money in an IRA (via a backdoor)
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Mega-Backdoor Your Roth IRA Some employers offer a benefit that allows more IRA contributions
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Use Low Cost Index Funds Save on fees and diversify your nest egg
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Use a Taxable Investment Account Don't lose your money to inflation
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Participate in ESPP Buy discounted stock purchase and divest immediately
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Max Out Your HSA Invest money in a pre-tax (and post-tax!) free account