Looking back at almost a decade of debt-elimination and investing, I can see that one thing has contributed to our financial success: Automation. Not only has automation made things easier, it has also forced us to be diligent.
Here are four ways to automate your finances and take a load off your money management chores:
Our bank offers free bill-pay. It allows us to set up regularly occurring bills like cable, cell phone, and city utilities. In the old days we would have to write a check, lick a stamp, and send it off in the mail. Now, when the bill comes due every month we simply sign onto our account, click a few buttons, and payment is sent on the date we selected – automatically.
Having certain accounts auto-draft a pre-determined amount of money from our account is one step closer to complete automation. I set up our investments to pull directly out of our account at certain times of the month so we never miss a chance to invest in our future. I know myself too well – it wouldn’t get done if it wasn’t automatic.
Setting up reminders for non-monthly bills have allowed us to save up for the quarterly and annual bills we pay. Reminders for life insurance, car insurance, and the occasional subscription to a magazine help me prepare for the month they come due. It’s as simple as setting up a reminder in Google Calendar or getting an email from the company.
Our bank also sends reminders for those expenses we have set up with bill-pay. It helps me stay in touch with price fluctuations so we can budget more accurately.
Only recently have we signed up to get alerts from our bank. Our bank automatically sends a text whenever a single payment greater than $500 leaves our account. It’s interesting to see when a check over $500 is cashed or when our tithe is drafted from our account and makes me more confident that I can catch fraudulent charges faster.
I didn’t take the idea seriously until a guest on my podcast shared his testimony of catching fraudulent transactions thanks to automated alerts.
The one thing we can’t automate – and shouldn’t
Budgeting. Yep, sorry. We can’t automate our budget. Why? Because every month is different.
That doesn’t mean we don’t budget all the other things mentioned above. It just means you can’t automate for things that fluctuate in price or variety. Try to automate how much you spend on gasoline. I guess you could only buy $20 of gas at a time but prices change from week to week – you will never know how full your tank will get from a Jackson and can’t take the chance of running out.
I believe it is extremely important to pay attention to our personal finances. However, it is wise to make it easier on ourselves by automating as much as possible. Setting up reminders and streamlining bill payments through our banks is the low-hanging fruit of efficient money management – allowing you more time to spend financial matters that require your attention.