Do you know of David Bach? If you'd like to be a millionaire, then you should. Bach became a self-made millionaire at age 30. And with his book The Automatic Millionaire, he's more than happy to share his tips to help you get there, too. So, here are 5 of Bach's best tips from The Automatic Millionaire.
1. Save an hour of your pay per day
All of us have savings aspirations. But life often gets in the way, and it can be difficult to maintain habitual saving over a long period of time.
David's solution is to simplify saving into a day-to-day practice: just save one hour's pay per day! For full-time workers, that usually works out to be about 12.5% of your paycheck.
OCSB TIP : Consider taking into account your 401K contributions and employer matching benefits.
2. Set up a "Pay Yourself First" plan
Prolonged saving is a virtuous task, but it doesn't need to be hard. Bach suggests you set up automatic transfers from the account that receives your paycheck into your savings accounts. This way, a small portion of your paycheck will automatically be set aside for savings.
Bach states, "When that money is moved before you can touch it, that's how real wealth is built."
3. Automate your bills
Following the above concept, Bach says it's important to automate and consolidate bill payments. In terms of consolidation, Bach suggests contacting your billers and asking them to move your billing date shortly after your regular pay day. He says that by doing this, we won't need to draw from our savings, and we're always operating with a clear sense of the amount of money we actually have.
4. Remember what you value
We're all guilty of regular splurges on things like lattes. It's such a widespread theme across America, that Bach actually coined it with a term: the "Latte Factor."
Bach says that by taking a long, hard look at how we spend our money on a daily basis and reducing our "Latte Factor," we can substantially improve our financial position.
"It's not about giving up coffees, or giving something up that you really enjoy," he clarifies, "but about looking at where your money is going and realizing you can still buy the things that are important to you and still actually have enough to save."
5. Start small
"You don't go from not running to running a marathon. You work your way up. Saving is very similar," says Bach. The most important thing is to get into a habit and to start early, even if you can only commit a small amount at the beginning.
Apps like Acorns are great for starting small and setting up a good savings habit.
Want to get started?
Owen County State Bank has over 90 years' experience in helping our local community grow their savings. Give us a call today to start your journey to better financial health.