- A financial advisor recommended the author to automate her finances, including bill payments and savings, despite her freelance income being unpredictable.
- Automation was applied to all aspects of her finances, including monthly contributions to retirement accounts and children’s college savings accounts.
- Two separate bank accounts were set up for discretionary spending and main expenses, which were also automated.
- Despite earning a substantial income, the author and her husband opted for disciplined spending to avoid overspending.
- After six months of automating finances, they were able to meet their financial obligations, contribute to their investment portfolio, and stay within their discretionary spending budget.
The author initially resisted automating her money due to the irregular nature of her freelance income. However, on the advice of her financial advisor, she set up auto-savings and bill payments, beginning a paradigm shift in her approach to finances. She learnt the importance of making monthly contributions to retirement and savings accounts and keeping up with bill payments.
It became necessary to separate their discretionary spending cash flow from their main expenses. Hence, two separate bank accounts were set up with different functions; one for main expenses and the other solely for discretionary spending. This allowed for clear distinctions between disposable income and regular financial commitments.
Despite a healthy income, the author and her husband adopted a disciplined approach to spending. They held off on big purchases to avoid spending beyond their budget. She argued that while it’s tempting to spend freely when earning a substantial salary, the disciplined approach to spending and saving was key to long-term financial success. This includes creating a budget that leaves room for occasional treats without breaking the bank.
The automation of their finances resulted in increased savings and investments, reduced financial stress, and improved fiscal discipline. Six months into financial automation, the author reports meeting their financial obligations, contributing adequately to their investment portfolio, and maintaining their discretionary spending budget. This newfound approach to managing money effectively demystified the finance management process, allowing it to become a seamless part of their lifestyle.