I hate budgets. I hate budgeting. I liken the idea of budgeting, to dieting; it sucks while your doing it and then you revert to your bad habits the minute you call it quits. For 99% of the population it doesn't work, so why do we even bother?

I suck at sticking to a budget and so does my wife. Being an accountant, I was able to quickly figure out that $1,000 in less $1,000 out; resulted in us living week to week. See I knew that what we were doing was bad for us, but we kept on doing it (sort of like junk food right?) People have a tendency to spend everything in their bank account (sometimes more), simply because the money was there. Then we'll usually suffer for about three days until that next pay cheque came in.

I knew something needed to change, but instead of trying to change our behaviour, I decided to change the system. I was going to tee it up so that it was actually illegal for us to pull our savings out of the bank and spend it on crap. I was also going to make sure it was going to happen without any conscious effort on my part. Because if it were up to my subconscious, that money would never make it into the bank account.

Then I read David Bach's: The Automatic Millionaire and it all made perfect sense.

So here's what we did:

Set up two First Home Saver Accounts because:
  • We were going to get 6% interest
  • We'd get the government co-contribution
  • Income was flat taxed at 15%
  • Money could not be withdrawn unless its for the purchase of a home

Then I decided to salary sacrifice 21% of our gross salary because:

  • Superannuation generally performs well in the long run
  • Salary sacrifice is flat taxed at 15%
  • As opposed to the individual marginal rates
  • Could not be withdrawn until retirement
  • By choosing a percentage contributions go up with our salary increases

All it took was an email to the payroll officer with a request to salary sacrifice 21% of our wage, then have the first $200 be directed into the home saver accounts. Most companies will be happy to help you out with this kind of request.

The end result is that I don't have to think about saving (even though I write about it all the time). The system I built does it for me. Yes, it took a bit of stuffing around, but it will be worth it in the long run.