The hardest part about keeping track of your finances is keeping track of your finances! We are human, and humans tend to either forget or procrastinate until its too late! That’s why it’s absolutely critical you automate your finances!
The best way to overcome this disadvantage is to remove all aspects that require thinking and instead automate it! It’s much easier to simultaneously juggle everyday life while letting your finances drive themselves.
The hardest part about keeping track of your finances is keeping track of your finances! Automate them instead!
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Well, good thing you’re here and reading this awesome post. Now we can go through ways that can help you automate your finances and help you reach your financial goals faster!
1. Automatic Bill Payments
This one is the first and definitely the most important automation trick to add to your arsenal! Set up automatic payments to automate all your bills (mortgage, car payment, credit card payment, insurance, etc). This will ensure that even if you forget to make a payment, the minimum payment will always be applied. You can always go back at any time and pay extra if you want. Here’s a helpful article:
Another extra tip here is to set up your bills to all be at the end of the month. Whenever you open an account with your credit card, phone, electricity, etc, you can usually pick when your billing cycle is. If you put them all together, it makes it much easier to know all the bills that are coming and automate this aspect of your finances.
2. Use Credit Cards for Everything
Now for this one, I’ll only recommend it to those that are very disciplined with their credit cards. If you ever carry a balance on your credit card, go ahead and move on to the next tip.
But those that always have a zero balance, this method works exceptionally well, especially if you use one credit card for all expenses. Not having to worry about what account was used for what transactions, you can always use the same credit card, and even Earn Rewards from it too!
3. Setup Automatic Investing
If you have any retirement account (401k, IRA, etc) you can set your deposits to occur automatically. The amounts can be as small as $5 a week to start with, small enough that it doesn’t affect your day to day. In no time it will grow to a sizable nest egg.
To even sweeten the deal, you could also Passively Invest in Robo-Investing platforms and also set up automatic deposits into them. I myself use Betterment to allow computers to invest for me. I’ve set up a $25 a week auto-deposit and just forgot about it! After a while, that auto-deposit becomes thousands of dollars! Trust me, this works!
Another fantastic app you can use, especially for beginners, is Acorns. Acorns rounds up your purchases to the nearest dollar and invests your spare change for you! Super easy to use, and perfect for beginners! I highly recommend checking this app out.
4. Set up Direct Deposit
If your employer offers direct deposit, always opt to set it up! In this day and age, the majority of employers pay using direct deposit, and it really takes away from the hassle of lugging around a paycheck to go deposit it, and potentially miss important payments!
This also allows you to automatically divvy up your paychecks to different checking and savings accounts. Direct Deposits are super simple but powerful tool at your disposal.
5. Automatically Increase Paying Yourself Over Time
The last and arguably most important tip here is to periodically increase how much you are paying yourself / contributing to your financial goals and retirement. Some services allow you to set a certain percentage you want to increase your contributions every year or every six months.
An increase of just 1% every year should not interrupt your day to day budget and expenses, but it will surely have a huge impact on your future. If this feature is not available with the service/platform you are using, I’d recommend creating a recurring calendar event for December 31st of each year with instructions on how much you will commit to increasing your savings.
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