Done To Zen

Mrs. Micah challenged everyone to find a single step to better personal finance:

Find one step you can take to make your financial system better or more organized.

Like mbhunter at Mighty Bargain, I have about a hundred steps I can take to make my personal finance better or more organized, but since we’re restricted to picking only one of them, I’ll go with:

Make savings automatic.

I do this already with 401K and for a weekly transfer of $30, but for the bigger amounts, I still do it automatically. For example, my emergency fund is still being built up manually. The reason I do it this way is that I have variable expenses that, well, vary widely from month to month. I’m worried that I’ll need my entire paycheck for something or another one month, but as the emergency fund amount is transferred automatically, I won’t have enough funds available for something — whether be it the transfer to the emergency fund or the bill-pay.

But if I really think about this, this is not a likely case and I’m only using it as an excuse to psyche myself out. With my variable expenses, I typically don’t pay them on my credit card around the end of the month, which means that I usually have a month and a half to pay them off. If it is the case that I need the extra money to pay these expenses off, then I have more than enough time to transfer money out of my emergency fund to make the payments, though I don’t anticipate this to ever happen.

Steps to take

1. Set up an automatic transfer of half the amount I want to save from each paycheck.

I’ve been procrastinating a great deal for a plan so simple…