This is a guest post written by Melissa Glidden for givingassistant.org.
Working toward financial freedom doesn’t have to be stressful. We’re now living in an age, where technology can help make managing money quick and easy. Just pick up any smart device or browse the web and you can connect with hundreds of apps or websites to help get your finances on track.
For many of us, time is our most valuable asset. Automation saves you time, enforces discipline, and increases financial savings.
In this article, we’ll explore 10 ways to automate your finances and save time and money. Using the 10 tips below, you’ll be able to set up your finances in no time.
However, before diving into automating your finances, sit down and take a critical look at your spending habits. This will give you a clear picture of your financial outlook. Take a few minutes to write down your monthly expenses, along with a list of your income streams and bank accounts.
While financial tracking apps can help make this process easier, you may want to complete this exercise manually to ensure you do not miss anything. Once you complete this list, you’re ready to dive in and start automating!
1. Assess your bills and research which offer savings for lump sum payments
Recurring payments such as insurance and memberships will sometimes offer a 5-10% savings break if you make a lump sum payment. Calculate the total for these payments and divide by 12 to determine the amount you need to save each month if you’re paying annually. Divide by 3 if you’re paying quarterly and by 6 if you’re paying every 6 months. We’ll discuss below how to save for these expenses and set up auto bill pay.
2. Look into what automation services are available through your bank
Commonwealth Bank offers a round-up service. For you US folks, Bank of America has a Keep the Change Savings Account. The banks will automatically round up your debit card purchases to the next dollar and place the change in your savings account.
These options are available with most bank companies. Check with yours to see what is available to help make saving easy and thoughtless.
3. Talk to HR about your finance options
Many employers offer the option to deposit a percentage of your paycheck to different bank accounts. One method you could use to take advantage of a payroll split is having bank accounts for long-term savings, an account for short-term savings, and one for routine expenses. Your monthly expenses would have the largest allocation. Start with a small percentage for your short-term and long-term savings and incrementally work your way up. This will help ease you into saving.
You can automate this by making your increase at the beginning of each year or on your work anniversary. As a disclaimer, this method will work for some people, but not for all. If you do not already have multiple bank accounts, you may want to avoid opening new ones due to extra fees.
Also, ask about employer-sponsored investment accounts, such as salary sacrificing arrangements. These are an easy way to automate savings. Speak with an HR representative to learn more about what retirement and savings accounts are available to you. As a bonus, by enrolling in an employer-sponsored plan, you are making pre-tax contributions, which may help you come tax time. Some employers may also match contributions. Yay for free money!
4. Enroll in cash rewards programs
Aggregator websites can save you time and money. Visit Giving Assistant to find discount codes and online sales for more than 3,000 retail locations. You can save with Giving Assistant by signing up to become a Savvy Shopper for free, where you’ll also earn cash back on your purchases. You can also upgrade to become a Power Shopper for only $5.99 a year, and earn twice as much cash back on your purchases.
5. Set up automatic bill pay
Using your bank or your account holder, you can have your recurring payments automatically drafted on a date you select. Whether you plan to pay monthly, quarterly or annually, you can ensure you never miss a future payment.
For routine expenses, such as your phone, internet, mortgage, rent and credit cards, you can set your automatic bill pay online or by calling the company. Unfortunately, sometimes mistakes happen. For the first month or two, check to make sure your payments are working properly.
6. Enrol in automatic shipments
You know you’ll need a new bottle of shampoo and conditioner in a month or a box of paper towels in three. Sites like Amazon and Jet make it easy to have these items delivered to you on a schedule. They’ll also often offer a small discount for doing so! Just be sure to include these items in your monthly budget.
7. Hide your debit and credit cards
Once you’ve automated your finances, you can cut down on carrying your debit and/or credit card with you everywhere. By keeping your debit and credit cards away, you will reduce your urge to shop impulsively. Allocate a set amount of cash for non-automated payments and only use those funds for its intended purpose.
8. Track your spending
Apps like Mint link to your bank accounts and help you easily track your spending. These apps are best for individuals who use debit or credit cards. If you use cash, then you will likely have to manually enter your cash purchases.
9. Keep a change jar
There will be months when you have cash and change left over from your monthly allocation. Empty the cash out into a change jar at the end of each month. But, don’t touch the jar until the end of the year.
You can deposit the cash into a savings account or splurge on something you had to forego earlier. Do whichever gives you the most satisfaction!
10. Sign up for identity monitoring
While living in the digital age offers many benefits, the threat of identity fraud continues to increase. With identity monitoring, you can receive alerts to any unusual activity that may be a sign of identity theft. You can sign up for TrustedID or LifeLock to have notifications sent right to your email inbox if any suspicious activity using your personally identifiable information occurs.
Automating your finances is a great first step toward achieving financial security. As you automate your spending, you may find that you’re spending less on frivolous purchases because you know you’re already covered.
It may take a few months before you’re fully up and running without checking your finances, but if you invest the time up front, you’ll find great reward in the long-term!
TFC Disclaimer: Guest posts are posted in good faith. I cannot attest to the originality of each article. If you have any concerns about the content, please contact the author of the article outlined above.