A week or so ago, I asked on Twitter what your automation plan looks like. Meaning, how are you taking your goals or bills and automating them to the point where you never have to think about it? Everything just happens, automatically.

Automation is absolutely key to sound financial practices, and it will be a part of my future “Kill It!” series of articles that I am writing (publishing over the first three months of 2018). Automation means you’re no longer responsible for remembering to pay your bills or fund your goals, or anything else when it comes to money.

It completely removes the need to be disciplined. You set it up once and literally forget about it. The computers take over at that point, doing exactly what you told them to do – repeatedly and meticulously.

The wife and I love automation. We hate remembering to pay our bills, so we’ve set up auto pay with anything that we possibly can. Though – since we live full-time in our Airstream, we don’t have a mortgage. Our “rent” (aka: camping fees) are paid with our credit card, which gives us points.

But, this automation holds true for everything else, like subscriptions and memberships, our cell phones and Internet and anything else that we need to turn into a recurring expense.

How we automated our future

Back when my wife and I worked full-time jobs, we had a budget – but we also applied the “Pay Yourself First” principle of funding our retirement accounts – in full – before any money hit our checking account. You’d be proud, David Bach. Real proud. Bach is the author of the incredibly influential book “The Automatic Millionaire” (affiliate link) that discusses the virtues of paying yourself first and automating the hell out of your financial life.

We maxed out both of our 401ks…maxed them out good. I got the feeling from my payroll representative in my former company that I was basically the only person in the company that maxed out their 401k. Ugh!

Our mortgage was paid automatically. Cable television (which we eventually ditched), telephone service, insurance, everything that could be made automatic, we did.

We even set up recurring monthly transfers from our checking account into an Ally savings account that we used as our emergency fund. Eventually, we amassed a whopping three years of living expenses in that Ally savings account, and we’ve earmarked that money to be used whenever the economy takes a turn for the worst.

Earmarking your money will be another major talking point in my future “Kill It!” series.

And naturally, we auto-paid our credit cards, in full, every month. We’ve never carried a credit card balance over to the next month – ever.

Not automated, yet? Here are four solid tips to get you started:

If your company offers a 401k plan, sign up! Use that sucker, because it’s one of the best ways that exists to save you money. 401k money is pre-tax, which means before the government gets its hands on your money (and trust me, the government always wants your money), it can be put aside for your retirement. It’s all yours. You only pay taxes on it when its withdrawn later in life (during your retirement). 401ks also reduce your taxable income, which lowers your tax responsibility to the government.

Limits apply. As of 2017, those under 50 can contribute up to $18,000 in their 401k accounts. If you’re 50 or older, an additional $6,000 can be stashed away in a company-sponsored 401k.

If you don’t have access to a 401k, or want an additional way to save for your retirement, open an Individual Retirement Account, or IRA. IRAs come in two different flavors: Traditional (pre-tax) and Roth (post-tax). You’re limited to the amount of money that you can put into an IRA based on your age just like with a company-sponsored 401k.

As of 2017, those under 50 can contribute up to $5,500 in their traditional and/or Roth IRA accounts. Those 50 or older get an additional $1,000 in saving power.

Traditional IRAs are pre-tax, so they work just like a 401k. Roth IRAs, however, are post-tax – which means you’re contributing already-taxed money into your Roth IRA. However, you don’t need to pay taxes when you take that money out. It is not taxed as income. Pretty cool!

If you don’t have an emergency fund (or a savings account), start one. Use recurring monthly transfers from your checking account to stash money into that account. Strive to accumulate at least three months of living expenses in cash. We use an interest-bearing Ally savings account for our emergency fund, which generates a little income month-to-month.

Savings accounts help to separate your “spendable” cash from cash that should not be spent, at least as easily. All money in your savings account is still liquid. You can get to it at any time. But, it also typically requires an additional step or two depending on the bank. Spend from your checking account, but save directly into your savings account (above and beyond your 401k and/or IRA retirement accounts, of course).

Automate your credit cards. Setup recurring monthly payments to pay your credit cards off in full. Interest on credit card balances kills our chances at getting ahead. Never carry a balance.

What are you doing?

Like I said, I asked on Twitter what you good people are doing to automate your financial lives. Here is how you’re getting ahead, automatically.

Oh, and here is a clever one. This guy is considering lowering his credit limit so it’s impossible to overspend his budget.

And here’s a tried and true method: Just pay off your credit cards, every month, automatically.

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