I was talking to a guy friend who is worries that his future wife would drain all his money. (I am sure he put it in slightly nicer words than that, but I figured I should cut to the chase). Her idea of "investing" is investing in a new pair of shoes (can we blame her?) and her idea of "saving" is saving for that new Mercedes she has always had a crush on. Money in the bank is money in your pocket ready to spend at the nearest mall.
The best advice I could come up with? Pay yourself first. (I'll admit it, my mom once gave me that saying... but I am going to give the action plan). I told my friend that he should up his 401(k) and roth IRA contributions that are automatically deducted out of his pay check. I suggested that each month he moved the money that he wants to save into a mutual fund before his future money-loving-wife can even see the balance appear in the checking account. He thought this was brilliant.
The next day I realized that this simple concept is not just for stingy-husbands out to deprive their wives of shoes for the benefit of their future children... this applies to ME! How many times have I decided not to transfer money into savings/mutual fund/investments/etc since "this month is crazy". Guess what? "this" month is ALWAYS crazy. December holidays, January vacations, February weddings, March birthday adventures... and then summer - oh my! The next day I went to work and up my % of automatic deductions from my paycheck into my roth IRA and 401(k). What an easy way to keep myself from spending my savings. Turns out, you can't spend money that you can't touch! (what a concept!)
For extra credit, some companies even match part of your contributions. Definitely check into this with your current company/firm. This is FREE money that you could be wasting. (And if this is the case? Feel free to write me a check with your extra bonus)
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