3 Actions to Take in an Hour to Build Wealth
December 20, 2010It’s very obvious to my friends and family that luck plays a dominant part in our fantasy football league. Why? Because I am tied for second place and will possibly make the play offs. Everyone knows that I am not skilled enough to even determine if I am getting the wool put over my eyes on a basic trade and truthfully, I don’t know the difference between a wide receiver and a tight end. Last year during my first season, my team finished dead last.
Why is this important? The fact is I spend about an hour a week at the most working on my team. The average fantasy football player spends 9 hours per week which to me sounds like a part time job. I can never understand how the men in my family can watch the pre-game show, the game, the post-game wrap up and THEN watch highlights of the very game we watched later on ESPN as well as reading about it in the next morning’s newspaper. I am not one to judge but I must say this is very odd behavior.
What I am taking a long time getting to is there may be an hour or two each week that could be spent on better things. I will bet each of us has at least one hour in our schedule that is spent on something relatively unimportant. The New Year is around the corner reminding us to get a fresh start; let’s look at what we can accomplish in an hour to move our finances forward in 2011.
Here are three most important actions to take in an hour to build wealth:
1. Automate your savings. Set up automatic transfers from your checking to your savings to build your emergency fund and pad your savings account. Consider setting up transfers for recurring expenses such as holiday spending, vacations, and property taxes so they don’t ever catch you by surprise.
2. Automate your retirement. Fortunately the 401(k) savings plan automatically is deducted from your paycheck each month. If you aren’t at the maximum, consider bumping to the max or setting up on an auto-escalation feature where it will increase each year a little at a time. If your plan doesn’t have that feature, increase it by a small amount that you’ll hardly feel such as 1 – 2% this year.
3. Automate your wealth building. Do you ever wish you had more in your investment accounts? Set up an automatic investment from your checking account to a brokerage account or a mutual fund to purchase shares every month outside of your retirement accounts. If you have an employee stock purchase plan at work, open an account or bump up your savings if you don’t have one.
Taking just one of these three actions can improve your finances, but all three could literally change your financial future. Consider how life would be if you never spent a dime in interest on credit cards because you prefunded your vacations and had a plush emergency fund to tap into when needed. Consider how great the benefit in retirement to have additional savings either to provide an additional income stream or to retire a few years earlier. The best part is you will be able to look back and say, that was an hour well spent.