i was looking for an ebook to read, and ran across this how-to-get-rich book “the automatic millionaire” that looked interesting so i actually paid for it. the thing that caught my attention though was the fact that it wasn’t like “get rich by flipping properties overnight” or how to invest, but more just money management principles that are sound and simple. i’m only half way through the book, but it’s pretty interesting and more than anything it’ s made me realize how poorly i manage and how little i save. strangely enough, most of the examples though are of a 27 year old making $50k/year, which is just about me.

i won’t bore you with all of the different things they talk about it, because if you’re interested, i’ll just give you the ebook, but one thing they mentioned that if at age 27, you put $3000 into a well-managed 401k each year, that by 65, you’d have $1.4million in the account. now that’s $1.4million in today’s dollars, so 30 years from now, that’s not going to be the same money as you think of it today, but that’s if you only put $3000 in per year. $3k/year is only $115/2 week paycheck, and at my company they do matching up to 5%, so if i was aiming at only the $3k, that’s only $57 (before tax) per paycheck deducted. anyway, i’ve already been contributing close to this for the past 10 years, but today i doubled my contributions, so at this rate, by 65, i’d have over $3mil in the account (and that’s assuming i never get a payraise in the next 38 years since contributions are a percentage, not a flat amount)

the ideas behind all of his money management tips are to make it automatic. budgeting doesn’t work. advertising is too strong… i’m too weak. but if these deductions happen before i even see my paycheck then i have no choice. if you “pay yourself first” you’ll be able to save. if you pay off all your bills first then look to save the rest, you likely won’t. under that idea, i also opened up a savings account here at my work today, and modified my direct deposit to pull out $150/paycheck, which if i never see, i won’t likely notice, and i’ll “automatically” save $4k/year. i was also sure to not sign up for an atm card, or online/phone banking for the account, so that i’m that much less tempted to use the money. and i’ll continue to put savings into my normal savings account whenever i have extra money to do so, but at least now i have a more sound savings plan going on in the background to give me some breathing room.