Inside: Find out how automating your finances will simplify your life and help you save more money.
Sometimes, between getting checks deposited, paying the bills, remembering to pull some money into savings, and contributing to retirement, it all seems overwhelming. Who has the time to stay on top of it all day in day out?
But what if there was a way it just got done? It would be wonderful if bills got paid while you were on vacation. At the end of the year, you could be proud of the fact that you managed to save 20% of your paycheck without even thinking about it.
Automating your money is how your finances can take care of itself.
Why you should be automating your money
You are lazy
Let’s face it, dealing with money can be a lot of work. Some people like sitting down and futzing with money management programs and paying bills and shuffling investments. But for the rest of us, it seems like so.much.work. Uuugggghh.
Wouldn’t you rather be doing something else?
Tasks will get done
I don’t know about you, but sometimes (ok, most of the time), the mail gets dumped into a pile. The bills get sorted out, but occasionally one gets lost in the shuffle for a bit. Or maybe you get distracted by life and then you look over at the pile of bills and say, “oh, sh**.”
If your money is on auto-pilot, you won’t forget.
Did the paycheck get deposited? No sweat, it’s done automatically, even when you are on vacation or sick.
Did you remember to pay yourself by transferring money to savings? Oh, yeah, no problem. It was taken care of without even thinking about it.
Bills paid on time? Yes!
Automation will help you succeed
It’s one thing to know what to do with your money. It is entirely another to actually DO IT.
If you have to make a conscious decision every single week, or even every single month, to tuck away 10% or 20% of your paycheck and put it into savings then chances are you will fail. That resolve will go the route so many New Year’s resolutions and other promises-to-yourself go.
Automating your money helps ensure you do things like get money into savings, put money into retirement accounts, and get those bills paid on time. By taking away the decision every month and having it made for you, you set yourself up to succeed.
What to automate
The very first financial task you want to automate is handling your income. If you don’t already do this, go to your company accounting department and find out how to get your paycheck direct deposited to your checking account.
While you are at it, if you don’t already contribute to a company 401(k) or similar plan, get that started as well. Two automation tasks taken care of in one stop.
This first phase is also when you want to line up due dates for your bills. As much as possible, set due dates for your mortgage and utilities and other bills to land a few days after your paycheck is deposited. Timing can be everything when dealing with money and if you can avoid having bills due right before your paycheck comes in, all the better.
Once you have set your income to be directly deposited to your account and have verified that part is working, then you want to automate the rest of your money.
Did you note which day(s) of the month your paycheck is deposited? The next step is to automate your savings. In your bank’s online system, you should be able to set up automatic transfers to other accounts. Set up transfers to savings and any other retirement accounts to happen a few days after your paycheck has been deposited.
Why a few days later? It allows time for funds to clear and handle any banking holidays that may happen. If you are worried about fund availability, set up a reminder to check your accounts the day before withdrawals are made.
We all hate them, but bills still need to be paid. Automating bill payments may be a little harder. Some things such as Netflix and other online memberships can be automatically charged to your credit card.
However, automatically paying utilities or even your credit card bill might be harder. Some systems allow it, some don’t. As many bills you can automate, get those set up to pay automatically. If possible, also arrange for the bill due date to be about a week after your paycheck is deposited.
Whatever bills you aren’t able to automate, sign up for bill pay reminders so at the very least, you don’t forget that the bill is due.
Also, you don’t want this system to be completely set-and-forget (as lovely as that would be). Stuff happens. Perhaps accounting is trying new software and your check didn’t get deposited like it should have. Or your phone company was acquired by another so the account number has changed and oops, your payment didn’t go through. Set up reminders to log into your account to verify everything is running smoothly.
This is an example of what your money might do. It fits well with the 50/20/30 flexible budget.
Once you take a little bit of time to automate your finances, your money is practically on auto-pilot. Without much thought, the bills get paid and the savings account is increasing.
Give automation a try. It is likely you’ll enjoy less stress in dealing with money and save time that is better spent doing those things you enjoy.