Chapter 10 · Companion tool
The Ninety-Minute Setup
One quiet evening. Coffee or tea. Seven steps, and the system runs for the rest of your working life. Check them off as you go; this page remembers.
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Step 1. Open the savings accounts
If your first month of expenses is not saved yet, open plain savings at your own bank and build that month there first. Then a high-yield account at an online bank: Ally, Marcus, Capital One 360, American Express, or a peer. Fifteen to twenty minutes. Confirm FDIC insurance. A joint account needs both owners.
If your first month of expenses is not saved yet, open plain savings at your own bank and build that month there first. Then a high-yield account at an online bank: Ally, Marcus, Capital One 360, American Express, or a peer. Fifteen to twenty minutes. Confirm FDIC insurance. A joint account needs both owners.
Step 2. Rename the account
Not 'Savings.' A name your future self will recognize.
Not 'Savings.' A name your future self will recognize.
Step 3. Set the recurring transfer
From checking, two business days after each payday, for your Chapter 9 amount: into savings at your own bank until the first month is saved, then at any double-digit debt until it is gone, then into the high-yield account.
From checking, two business days after each payday, for your Chapter 9 amount: into savings at your own bank until the first month is saved, then at any double-digit debt until it is gone, then into the high-yield account.
Step 4. Open the investment account
401(k) or 403(b) to the full match first, in the benefits portal. No match, self-employed, or past the match? A Roth or Traditional IRA at Vanguard, Fidelity, or Schwab (self-employed: Chapter 15 covers the bigger plans too), funded once your first month of expenses is saved and any double-digit debt is gone.
401(k) or 403(b) to the full match first, in the benefits portal. No match, self-employed, or past the match? A Roth or Traditional IRA at Vanguard, Fidelity, or Schwab (self-employed: Chapter 15 covers the bigger plans too), funded once your first month of expenses is saved and any double-digit debt is gone.
Step 5. Set the automatic contribution
Only once step four says to fund the IRA. Into the IRA, for the retirement share of your plan, two business days after each payday. It comes out of your Chapter 9 amount, so lower step three by the same number. Payroll handles the 401(k).
Only once step four says to fund the IRA. Into the IRA, for the retirement share of your plan, two business days after each payday. It comes out of your Chapter 9 amount, so lower step three by the same number. Payroll handles the 401(k).
Step 6. Turn on automatic investing
The step most people miss. Workplace plan only for now? Pick the lowest-cost broad index or target-date fund on its menu and stop there. In an IRA, money that lands must buy the fund automatically, or it sits as cash.
The step most people miss. Workplace plan only for now? Pick the lowest-cost broad index or target-date fund on its menu and stop there. In an IRA, money that lands must buy the fund automatically, or it sits as cash.
Step 7. Log out and go to sleep
The next time you think about this, the numbers will already be real.
The next time you think about this, the numbers will already be real.
Where people open these accounts
No relationship with any of them, no referral fee. The specific bank matters less than the separation.
- ally.comAlly Bank · online high-yield savings
- marcus.comMarcus by Goldman Sachs · online high-yield savings
- capitalone.comCapital One 360 · online savings
- investor.vanguard.comVanguard · Roth IRA and index funds
- fidelity.comFidelity · Roth IRA and index funds
- schwab.comCharles Schwab · Roth IRA and index funds
- fdic.govFDIC · confirm the bank is insured before you move money in
A pilot does not run the checklist because he has a poor memory. He runs it so the airplane is ready the same way whether he is sharp that morning or running late. That is what the seven steps above are doing for your money.
Keep the streak going
Finish the chapter in the book, then come back for the next tool. If something here did not land, bring it to Open Mic and I will walk through it live.