Automating Your Finances

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Although you may be dealing with a hectic schedule, it is still important to stay on track of your finances. If they slip through the cracks, you could be facing late fees and worse, a damaged credit score. However, when you automate your finances, it is easier for you to stay on top and maintain control of your money.

Even though personal finance can be simple, it is not always easy. Each day, advertisers and marketers are coming at you with new products and hard to resist sales pitches to get you to spend your money. After all, you earned your money, so you deserve to spend it right? However, this type of thinking can lead you to not having enough money left over to cover your bills. That is why automating your finances can make sense.

It takes little effort to set up a money management system that will automate your finances so you can get on with other important activities in your life. Below are some ways to do this:

Simplifying Your Financial Life

Set a process up to pay your bills automatically, deposit money into savings, and leave yourself with a little left over for entertainment and discretionary spending.

When you automate your finances, everything can be done digitally, which makes it easier than ever to manage all your banking.

A shift to digital makes your bill payments more secure since you are not relying on the mail to send out checks. Managing your finances becomes more convenient as it only takes a few clicks to transfer money or to set up periodic transfers. Also, with today's smartphone apps, you can even manage your finances through the convenience of your mobile phone or tablet.

Direct Deposit

Setting up direct deposit is as simple as having your employer deposit the amount of your paycheck directly into your checking account. Most direct deposit services will also allow you to break your paycheck up into multiple deposits that you can direct toward different accounts.

Automatic Payroll Deductions

Also consider automatic payroll deductions, which allow you to pay yourself first. You can deposit a certain percent or amount of your payroll check into your checking, savings, 401K, or other accounts automatically, so you will be less tempted to spend that money later on.

Here’s a good system that can simplify your financial life. Compile a list of all your accounts such as:

  • Checking
  • Savings
  • Retirement Savings
  • Credit Cards
  • Student Loans
  • Utilities
  • Cell Phone
  • Car Payments
  • Other bills

Gather up the URLs for their website addresses and your login information all in one place.

Next, go online and log in to each of these accounts and link each one together, where it's appropriate. It may take several days for the accounts to verify these links. Examples include:

  • Link your retirement savings account to your paycheck.
  • Link your savings account to your checking account.
  • Link your bills to your checking account.
  • Link your credit card accounts to your checking account.

If you have questions or need assistance getting through this process, your bank representatives are more than willing and available to lend a hand.

Once you link your accounts, you can automate your payments and transfers to distribute your money between all of your different checking, savings, investment, and creditors.

Automated Savings

By automating your savings, you will no longer have to remember to "feed" your savings account. You will have an automatic transfer system from your checking account into your savings account. The amount you want to transfer each pay period from your checking to your savings account is up to you. Apply this also to linked investments such as mutual funds or stock broker accounts. Doing this ensures a foolproof way of ensuring you pay yourself.

Automated Bill Pay

Your online banking system will let you set up automatic monthly bill payments for your mortgage, rent, credit card payments, or utilities by choosing a monthly withdrawal date that your bank will issue payment from your checking account. Alternatively, by setting up automated payments with companies that allow it, you may be offered discounts or lower rates. Automated bill pay also helps you to keep your financial records organized since you can more easily track them in your online account.

All it takes is a little strategic thinking and a little time to get your automated financial system up and running. When you automate your finances, you are taking control of your financial security for today and the future. Once you set everything up, it will surprise you how simple managing your money can be.

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