What if you didn’t have to spend so much time on your finances? What if everything was streamlined or automated? Many people don’t realize that you can spend a little bit of time making your finances easier to manage. Whether you automate your savings or bills, you can make things easier. Let’s take a closer look at how to automate your finances.
Have Your Paycheck Deposited
Instead of going to the bank each pay period, have your employer automatically deposit your paycheck into your bank account. You can even choose to have part of your paycheck deposited into your savings account, if your employer offers this option.
I hate going to the bank. If I need to go inside to see a teller, the line is always super long (especially on Friday afternoons). If I can do anything to avoid going into my bank branch (like direct deposit of my paycheck), I'm going to do it!
Setup Automatic Savings
When you setup an automatic savings plan, you treat your savings like a bill. The money is automatically moved from checking to savings. This makes things so much easier. You want to determine how much you want to save from each paycheck and setup your bank account to move that amount the day after you get paid. If your employer offers the option to put part of your paycheck into savings, this is an easier option.
We transfer money automatically to our savings acount for our sinking funds on the 15th of each month (after my husband's mid-month paycheck). I like not having to worry about remembering to make the transfer.
Pay Bills Automatically
It can be easy to forget to pay a bill. The next thing you know you’ve got a late charge. Instead of dealing with those late charges, set your bills to be paid automatically. This will make your life so much easier. And, if you’re having your paycheck deposited by your employer, you know that the money is already in there.
If I can't pay my bills automatically, I schedule them to be paid in my bank's app as soon as I receive the bill in the mail (or online). That way I don't have to remember to pay anything when I do it right away.
If possible, pay your bills a year at a time. There are many companies that will allow you to pay in advance. Some companies will even give you a discount. For example, many companies give you two months free when you pay for a year at a time. This can save you a lot of money and also make it easier to manage your finances.
I'm a sucker for discounts, so if I can get any type of discount of paying a year at a time, I do it. We pay our auto insurance bill annually to both get a discount and also to avoid monthly premium surcharges. Then, I save for that annual payment each month in our sinking funds.
You can also have money automatically sent to an investment account. You can set instructions where to invest the money as soon as it hits your account, so you don't have to worry about making choices each and every time you invest.
We do lots of automatic investing. We deposit in my husband's 401(k) automatically with every paycheck. We also have a Health Savings Account that gets funded with every paycheck. We also have money transferred automatically each month to my boys' 529 college savings accounts. I love how our savings builds over time without us really having to think about it.
When you automate your finances, things are just easier. Knowing that your bills are paid and your savings and investment accounts are being funded without spending time each week will make your life easier.