If you struggle to save or stick to a budget, you’ll be surprised at how automating your finances can change things for you and put your mind at ease.
When it comes to your finances, if you don’t see the money, it’s harder to spend it. That’s the beauty of automation. It removes willpower from the equation and doesn’t leave things to chance.
To get the best results, you should be applying automation to as much of your finances as possible – savings, retirement, paying your bills, investing. Here’s how.
Build your emergency savings
It’s so easy to focus on the now and not the future. How many times have you planned to transfer money from your checking account into your savings, but you forgot or procrastinated and ended up spending the money?
A great way to build your savings using automation is to properly set up your direct deposit allocations at work. Often, you can have a percentage of your salary automatically deposited into a savings account each pay period.
If your employer doesn’t allow allocating your direct deposit across multiple bank accounts, you can still automate your savings by speaking to your bank. Tell your bank the dates you get paid and ask for a portion of your pay to be transferred into a savings account the next day.
What’s great about automation in this instance is that the money will have moved into your savings account before you even knew it was missing.
Automating your retirement fund
Retirement funds are a fundamental financial resource to many people, so it’s no wonder that many people automate their 401k allocations.
But it still is good to verify that you’re taking full advantage of your opportunities to automate here. Confirm that the amount you’re putting into your retirement fund is set to the max, if possible – especially if your employer matches your contributions. You’ll be surprised how much this can add up to.
Track your expenses
Spending within your set budget can be one of the hardest skills to manage. One way to get better at this is to track your expenses. And guess what? You can automate it.
There are tons of free apps you can use to keep an eye on this. They aggregate all of your spending so you can see where you’re spending too much and where you can cut back. Join the onUp challenge to find out more about this.
Another tip to track your expenses is to only use one debit or credit card for a whole month for everything. At the end of the month you’ll be able to review your bank statement and see where you’re spending and what you can cut back on. Your habits may surprise you.
Lastly, to stay on top of your bills, automate the payments. This can be helpful for recurring bills that charge the same amount, such as a phone bill or student loans. Be mindful of what you’re paying with your bills and look for ways to cut costs. For tips on how simplify your bills, look here.