Another late payment? Forgot to save again this month? Paying more needless fees?
Managing money can seem exhausting! It takes time to keep up with bills, track your spending, and review your budget. And if you’re like most people, you’d rather do just about anything else!
But, managing your finances doesn’t have to be time consuming or painful. It can be easy, stress-free, and done in minutes. All you need to do is set it and forget it with financial automation!
Many people spend countless hours each week reviewing their financial affairs. They open mail, sort through bills, and try to determine if they have enough money to make ends meet.
Others struggle to save and pursue their financial goals. Often, they lack financial discipline [link] and are easily distracted.
But, financial automation helps you stay on track. It ensures that you are putting money away and working towards your plans for the future!
Automating your finances streamlines money management. It removes you and puts your finances on autopilot. This gives you more time to spend with friends and family, pursue hobbies, and work towards your financial goals!
Want to become debt-free? Financial automation can help
Want to save more of each paycheck? Automate your finances
Financial automation is the “set it and forget it” kind of money management which helps eliminate human error, too. It frees you from having to keep up with bills and their due dates, allowing you to pursue more important things.
Once your finances are on autopilot you’ll systematically save, transfer money, and pay bills on time. Thus, guaranteeing that you aren’t wasting money on needless late fees, service charges, or interest!
Financial automation creates a system for your money. It provides a procedure for your resources to follow. So, that you don’t have to think about it!
Here are the 5 steps you need to take to automate your finances.
Income is the foundation of every budget. It’s the money that you receive and direct to your savings and spending.
Today, most companies require their workers to sign up for direct deposit. They want to save time and money by not printing and mailing paychecks. So if you haven’t already, be sure to sign up for direct deposit.
Many employers allow you to direct your paycheck to multiple places, too. Set yours up so that you have a portion going to your retirement account, savings, and checking account.
Financial automation gets based on the pay yourself first budget. This is a system that ensures you’re saving and working towards goals before you begin spending.
If you’re like most employees, your financial order of operations starts with a 401k. Contribute the minimum amount of money to it that gets you the full employer match. And if you’re unsure of your benefits, contact your HR department for help.
The next place you’ll transfer money is to your savings account. Then, designate a portion of it for large purchases, irregular expenses, and for meeting your goals.
Ally Bank and Capital One offer unique savings accounts. Each allows you to create subcategories within your main account which can get used to save for multiple things at the same time!
When you first start, aim to have a savings ratio of at least 15%. Then, as you build the habit of putting money aside and watching it grow, you’ll get motivated to save more.
Now that saving is out of the way, you can concentrate on spending. Transfer the remaining balance of your paycheck to a checking account. Then, use this money to buy the things that satisfy your needs and wants.
Most bills come due once per month and they typically have a grace period. This is a specific amount of time that you need to pay before interest starts accumulating and compounding.
The trick is to avoid these unnecessary expenses. In order to do that, you must determine when you’re paid and when your bills are due.
Most people can split their bills up between their paychecks. They can use their income to pay some expenses with one check and the remaining ones with the next
But, if the majority of your expenses are due at the same time or if you have irregular pay, then you may need a buffer. A small amount of money that you save to pay bills and tide yourself over between paychecks.
Today, almost every expense can get automated and paid online. A few examples include:
Consider the most efficient way to pay your bills, too. Many creditors accept payments through automatic debit. For a fee, they will pull your payment directly from your checking account.
To save money, use the bill pay feature that your bank offers. They’ll make the payment for free and on time. So, that you don’t rack up needless fees in the process!
Also, some companies require a credit card to set up autopay. They charge your card and you accumulate points in the process. Over time, these points can get redeemed for travel deals, discounts, or free money. A few of these companies may even permanently lower your bill just for signing up!
It’s not hard to automate your finances. But, it does take some time to get it setup.
Once your system is up and running, you’ll want to make sure it’s operating without a hitch. Check that you’re automatically saving, paying bills, and following your financial plan.
It’s easy to monitor your financial automation using apps like Mint and Personal Capital, too. In minutes you can check your transaction history and account balances. Allowing you to rest easy, knowing that things are running according to plan.
Achieving your financial goals comes down to two things, time and money. The more cash you can put away each pay period, the faster you’ll reach your goals!
For example, imagine you’re planning an around the world trip and you need to save $50,000. You could put away $1,000 per month and go on the adventure in 50 months. But, if you could save $250 per month extra, you’d be able to leave and start having fun 10 months sooner!
Challenge yourself to live on less. Find ways to reduce your top expenses and live frugal. This will allow you to save more and start living out your dreams faster!
Most people believe that personal finance is complicated and stressful. But, it doesn’t have to be.
Financial automation makes money management simple. It sets up a way for you to consistently follow your financial plan. So that you can save, pay bills, and create the life you’ve always dreamed of!
How will you use financial automation to make life easier? Comment below.
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