The average, run-of-the-mill, financial advice is simple: automate your investments. Preferably, a predetermined dollar amount is set to auto deduct right from your paycheck and wired into investment accounts. I agree with this approach and take it further by automating spend.
The single best attribute from automating the vast bulk of spend is that it saves us time.
For example, I typically grab a few Altoids after drinking a cup of coffee. The cost of purchasing Altoids from a convenience store runs $2.78 at our office. Compare that with my current automating spend approach of direct-to-door-delivery rate of $1.23. (details below)
People might scoff at saving $1.55 per Altoid container, but I prefer to look at it as saving 56% on the purchase price, AND skipping the line at check out.
The article/details mentioned above (with the link here) is an article we wrote breaking down how we save over $1,000 per year on household goods such as toilet paper, cat supplies, and even cosmetics with the help of subscriptions services. We use a free service offered by Amazon called, Subscribe and Save, which is different from the paid service of Amazon Prime.
Now that our routine household spend is almost entirely automated, we spend more time on our other hobbies.
This goes back to my old motto: If we spend 2,000 hours a year earning money, then we should spend some time learning how to spend, invest and grow our money.
In comparison to how we USED to live our lives:
We spend 2,000 hours a year earning money and then 200 hours throughout the year stressing about money.
For a short period of maybe six months back in 2013, I was constantly checking my account balance and was terrified that I would only have $25 to last me the rest of the week.
I was scared I would miss a student loan payment and my credit score would reflect that for 7 years!
Fear is only one of the emotions I felt. There was also guilt and the creeping feeling of falling short of where I felt like I should have been at the time. I had read well over 100 books on personal finance but I hadn’t actually had time to develop smart habits. The kicker was dating a beautiful woman who shared the stress, which made me more motivated than ever to take control of our financial situation.
It took us a few years to piece everything together, but I encourage you to get the ball rolling now, because changing habits does not happen overnight.
My Last Hurdle with Automating Spend
I don’t see why finances should be different.
But, I understand they are different, especially at the start.
In our case, we had PLENTY of negative habits. The main one was eating out A LOT. By a lot I mean ALL THE TIME. As in, at least once, sometimes twice a day. We’d grab lunch at work and often grab dinner too. These were also the days where we were both used to working long hours, with my longer weeks stretching past 80 hours.
Sure, I felt the thrill of unhealthy food and not having to clean up after my own mess, but I was also falling behind the race towards financial freedom. Seriously though, I miss tacos and sushi about three times a day. Instead of indulging, I’m scarfing down farro with kale (delicious, by the way) or rice and beans. #TheFrugalLife
Over the years we tried different methods of cutting down on our food spend. We’d find coupons and shop for great deals to save money. We tried to cook more. We even tried a food delivery services and learned how to cook restaurant quality meals at home. This was great at first but we were still paying a premium on our cooked meals. We even used a grocery delivery service for a time, but that wasn’t cutting it either; our spend was still high.
At the end of the day, the only result we wanted to see was behind a brick wall labeled, “effort”. Albeit, the effort here is relatively light, but now, each weekend I’ll spend half a day on grocery shopping and cooking.
My rule of thumb is automate what we can, and get through the rest efficiently.
The end result? We’ve gained MORE time over the past 2 years. Of course, our savings rate has seen major gains as well, but time is really what’s most valuable to us.
Even with cooking, I’m saving time. I don’t need to think about what I’ll be having for dinner or lunch on any given weekday. When we’re hungry for dinner we simply heat up the food. I’d wager that those weekday savings take a large chunk out of my weekend cooking time.
How are you automating spend? Are there areas of your spend that you are working to improve?
P.S. We took 5 minutes to share our favorite online savings tools (where I mention Subscribe & Save) on one of our latest episodes here: