Frontloading My Retirement Accounts
Each year I frontload my retirement accounts, meaning that I invest the maximum amount in my IRA and 401(k) at the earliest opportunity. In terms of my IRA, I try to make my annual contribution in January. In terms of my employer sponsored plan, each pay period, 20% of my salary is deposited into my 401(k) account. That means that during the first half of each year, my takehome pay is substantially less than what it could be. But since I don't ever see that money, I never really miss it. And around this time of year, after I've maxxed out my 401(k) contribution, there's a really nice surprise waiting for me in the form of a huge bump in my takehome pay. Of course, when I see all of that extra income sitting in my checking account (the beauty of automatic payroll deposits), there's a huge temptation to blow it all on something frivolous and fun. But that's where discipline and goal setting and bit of trickery come into play. Cause again, if I don't see it, I won't touch it.
So, as an added precaution, I set up an automatic transfer. In other words, at the beginning of each month, before I can dream up ways to spend it, that extra cash is swept from my checking account (which I check on a daily basis), into my HSBC savings account (which I only check once a month.