Pay day has come and gone, and you managed to save nothing.

Again.

You know the importance of saving money, but figure you will save what’s left after all your other expenses.

Then you blink and there is nothing left.

Saving is hard.

You need to make the conscious decision to put money aside.

Temptation to spend money is everywhere, bills are lurking around every corner and the mortgage is due at the end of the month.

By automating your finances you are able to set it and forget.

 

 

What Does it Mean to Automate Your Finances?

To automate your savings, means setting up automatic transfers between accounts, to either pay your bills or put money aside for your savings goals.

That means no running to the bank, no forgetting when a bill is due, and paying yourself first!

What Can You Automate?

 

Probably the most important automation would be to start with having  your paycheque automatically deposited into your bank account.

Most employers offer this option and now-a-days it may be the only option.

You also have the option of having money transferred straight into a retirement account, along with typical deductions, so by the time that final paycheque hits your account, you have already saved money (BONUS!!)

From there your can further set up your accounts to pay bills on time, and save money on your behalf.

 

The following are things you can set up to be paid automatically:

• Mortgage/ Rent Payments
• Maintenance Fees
• Property Tax
• Cable/ Internet
• Utilities
• Home/ life Insurance
• Car Insurance/ Loan
• Credit Card Payments
• Student Loan Payments

The following are ways to save towards your financial goals:

• Retirement Account
• Tax-Free Savings Account
• Investment account/ Brokerage
• Emergency Fund
• Short-term Savings Goals (Vacation, wedding, fun-money)

 

Tips to Make Switching to Automating Your Finances Easier:

 

You may be thing thinking, that sounds like too much work.

 

Start with one or two automatic bill payments or transfers a month. This will help to cut down on the overwhelm, and to make sure every penny is going where it should and when.

For savings, start with a small amount of your pay and work your way up if you can afford it. 

Banks and companies make it very easy to set up these automatic transfers these days (After-all they want your money, the faster the better).

When signing up for a bill-able service, companies will ask for your account number and occasionally which date your would prefer being charged on (Usually the first, last or the 15th of the month).

Once you have the automatic transfers set up, on days that work for you, make sure all payments are coming out and the correct amount at the right times.

I usually group payments towards the start of the month, so the big bills are out of the way, and I can work with the rest of my money.

 

How does automating all that, actually benefit me?

Keep reading and I’ll let you know how I benefit from automating my savings, and how you will too!

 

1. Beat Temptation 

 

With automation!

Payday has arrived, and you see your total paycheque and think of all the wonderful ways you can spend it.

Sure you’ll pay bills and shop frugally, but the rest is free game!

This can be dangerous way of thinking, you may end up overspending, missing a payment, or even rack up some debt. Then before you know it, be struggling financially.

By having money automatically transferred from your checking account to a savings account, you are less likely to spend that money, and you may not even notice it is gone. 

Automating some funds bi-weekly or monthly, can really help with your savings goals, as the money will be out of sight, and harder to get to. 

 

 

2. More Time

By automating your finances you get the great benefit of more time.

Less time is spent running to the bank, making last minute transfers, or looking for the energy bill in the pile of papers on the dinning room table.

With all the time you save from automating your finances, you can put it into setting up ways to save or grow your money. 

 Of course you will still need to check in, to make sure money is being transffered and on time. I pop into my bank apps to look at my accounts a least weekly, if not more often.

Make sure you still take time to review your budget, and plan for unexpected expenses.

However by setting up transfers with the help of technology, you will be taking a great deal off your plate.

 

3. Pay Yourself First

By paying yourself first, it cuts out the excuse of “I’ll save if there is any left”.

We all know the importance of saving money, but sometimes put it on the bottom of the list.

By having money automatically deducted from your account on payday to go straight into your savings accounts, you will be putting savings at the top of the list.

 

For myself, I have money transferred to my:

• Retirement account
• Emergency fund (Regular savings account, will switch to a high-interest account soon)
• Tax-free investment account
• Wedding fund (Joint account with my boyfriend)

 

4. Reduces Human Error 

You forgot to pay the electricity bill on time, again. You don’t want to be sitting in the dark.

Perhaps the money you were going to use to pay rent, you used on gas and groceries. 

We have all been there, we all make mistakes.

Have you ever entered the wrong amount, and later got charged interest for the remaining balance (I have, lesson learned). We have so many other things going on in our bust lives, we can sometimes overlook payments or use money we shouldn’t have.

One of the great benefits of automating your finances, such as bill payments or transfers to savings, you will have that money put aside and not have to worry about making an error or forgetting.

 

 

5. Saves You Money

So you made the mistake of forgetting to pay, or you did not have enough money to cover the entire payment.

There is usually a late fee added to a missed payment, bounced check, or overdraft.

Interest charges can add up very quickly, and implementing a way to combat those pesky charges can help.

Automate finances have the correct amount transferred or withdrawn at the correct time, helping you avoid missed payments, incomplete payments or overpaying.

 

6. Saves Your Credit

 

Not only does automating your finances benefit your wallet and save you money, it can also help your credit score.

Your credit score can decrease if you regularly miss payments, or have accumulated a large amount of debt.

By having a bad credit score, it can impact your ability to get a loan, such as a mortgage or car loan.

Benefit your credit score and keep it healthy, by making sure those bills are paid.

 

7. It Forces You to Be More Frugal

 

Since all your bills are being paid, and you have now started putting a portion of you pay into savings, you may not be left with much money left over to spend. 

Perhaps you need a new coat but don’t have $200 dollars to shell out. So you checkout the thrift store, or search online for a coupon code. 

Maybe you went overboard on groceries last week, so you stretch what food you still have to make it work.

You check your spending habits and see you ate out for lunch four times this week costing you a total of $50. You opt for bringing a lunch from home next week.

By having less to spend you are forced to be a little more frugal to stretch what money you do have.

 

8. Reduces Stress

 

One of the biggest benefits to automating your finances is the reduced stress.

Money can be a bigger stressor for some people.

Less worrying about saving for retirement, if you paid that bill, or sorting threw the mountain of mail.

 

 

9. Allows You to Build a Safety Net

 

Whether you are building an emergency fund, making contributions to your retirement account or investing, you are putting money aside for the safety of your future.

By making regular payments overtime, you can build a nice nest egg. With the help of regular contributions and compound interest, you are getting closer to financial security.

 

10. Save for Large Purchases 

Another benefit of automating your finances is that it helps you reach those larger purchase goals.

I never really used to save money for large purchases, I would just throw it on a credit card and deal with it later. 

Work backwards, determine the amount of money you will need, and by when. Divide the cost by the number of months until purchase and contribute that amount each months to a savings account. (Say you need $300 dollars in 5 months, that means you would have to put aside $60 a month for five months to reach your goal).

 

To Conclude

Automating your finances can help you have more time, reduced stress and help you save money, while you keep on top of your bills.

Sit back and enjoy the benefits of automating your finances.

 

 

Let’s Chat:  

Do you use automatic payments or transfers? What do you currently automate?

Would you go back to the old school way, before automation? 

 

 

 

Stay Frugal,

 

 

Connie XOXO