Few things are more stressful than money. Between paying bills, buying essentials, saving for retirement, and saving for a rainy day, personal finance can seem like a full-time job.
There are many benefits to automating your finances. You’ll pay your bills on time, eliminating late fees and protecting your credit score. If you can’t save money, you can transfer a fixed amount each week or month to a savings or retirement account. But to improve your money can be useful, you still need to be careful about it.
The goal of automation is not to be completely manual. It’s more than just managing your finances, you can change your mindset from actively managing your finances to managing them effectively.
Decide what you are working on
Before you automate, you need to check where you are. Write a list of all the accounts you use each month.
Next, list all the monthly payments you make using the same account and the due date. If there is no due date, do not apply.
Combine the payment dates of your invoices
Not all companies allow you to change your billing date, but many do. That includes credit card issuers, companies, and lenders. Some will let you change the date online, while others will require you to call customer service or fill out a form.
Rescheduling the due date for one or two days per month is a good idea. This reduces what you need to track and gives you better control over your financial process.
Try not to pay the most important debt on credit
Credit cards are useful tools, but they can also be dangerous. If you pay your mortgage by credit card, for example, you may find yourself paying interest on the mortgage when you pay off your credit card. The same goes for loans that you pay interest on.
Set up automatic payments, notifications, and reminders
Setting up autopay is a straightforward process, although the steps will vary depending on your bank or credit card issuer. Generally, you can access your account online or on a mobile app. From there, you will see a payment tab or menu with Autopay settings. The same goes for companies and lenders. If you’re having trouble finding it, try entering “autopay” or “autopay” into the site’s search bar.
Plan your budget
Invoices aren’t the only thing you can recycle – they can help build revenue and budget, too. This process should not be complicated.
This is an easy way to set aside 50% of your salary for rent and other expenses, 30% for changing expenses, and 20% for savings. If you pay your mortgage from your checking account, open a second checking account for reasonable expenses and a high-income savings account to, well, save. This is a great way to manage your finances.
You can make automatic budgeting and saving as simple or complex as you want
For example, you can set up several checking and savings accounts for specific purposes, such as vacation and emergency funds. If you have a savings account, you can also set up recurring payments for them.
Review your schedule regularly
Automation involves a lot of work upfront. But you can relax once it’s done, right? Well, yes and no. You don’t have to do the same thing, but it’s still important to monitor how well your system is working and make any necessary changes.
Conditions are changing. Maybe you have a large credit card bill for one month that requires you to go from paying in full to making smaller payments. Perhaps the hot summer is driving up your electric bill. Regardless of the reason, automatic money transfers are easier than remembering to pay and save money manually.