As someone who is lazy when it comes to managing my money, I abhor traditional budgeting and am picky about the tools and apps I use to up my financial game. But there is one thing I’m a huge fan of and can certainly vouch for, and that’s automating.
When I started to get knee-deep into budgeting, creating excel sheets and using apps during my college years (pushes glasses up nose), one of the first things I did was automate my bills every month, including my credit card bills and student loans. As I started earning more, I also began to automate to save up for things like a new computer, an epic vacation, and even my retirement.
Benefits of Automating Your Finances
If you’re thinking about automating your finances, take a look at some of the major benefits:
- You’ll save time. Instead of having to log onto every single one of your accounts, you just need to set up auto pay once. Yup. You can say goodbye to the extra effort it takes to set up a separate transaction each time you have to pay a bill.
- You won’t have to think about paying bills. By automating, you won’t have to remember to pay your power bill and fret over whether you paid a bill late. You can rest assured that your bills are paid on time.
- You pay yourself first. In my humble opinion, the true sweet meat of automation is that you can effortlessly sock away money toward your savings. By automating my own savings goals, I don’t experience the pain of having my hard-earned cash go toward boring, lame purchases like gas. Instead, I know that I’m consistently making progress toward saving for things that excite me the most, like my dream trip to Australia.
If any of the above sounds appealing it may be worth checking out Chime. Chime is a mobile banking app that helps you put your savings account on autopilot. The mobile bank’s Automatic Savings account helps save you money by automatically setting aside 10 percent of every paycheck you deposit into Chime. You can also turn-on automatic round-ups on every purchase to transfer the difference to your savings account each time you use the Chime debit card. Even better, the banking app doesn’t charge overdraft fees, foreign transaction fees or fees for monthly minimums and ATM use.
Tips for Automation Newbies
Once you’ve decided to automate your finances, here are a few more pointers to help you get started:
- Figure out a schedule. You can begin by taking a look at all your bills and determining your savings goals. From here, schedule your auto payments online. For instance, if your rent and utilities are due during the first half of the month, schedule these payments earlier in the month and set up autopay dates for your savings goals toward the end of the month. Keep in mind that while you may have zero control over the due date on your rent, you may be able to change the due dates of some of your other bills by calling the providers, such as your cell phone or wireless company. If you’re able to change due dates, this may help you pay these bills at a time during the month when your cash flow is at a high point.
- Have built-in buffer dates. I like to schedule auto pay on my bills at least a few days before they’re actually due. For instance, if my credit card bill is due on the 25th of each month, I schedule them for the 20th. This way, if there’s a snafu—which there rarely is—I have a bit of wiggle room to still pay the bill on time. Another tip: If you have a job and get paid via direct deposit, try not to schedule any bills to be paid right before payday. This way you can make sure that your paycheck is deposited into your bank account before any automated transactions occur.
- Set up email notifications. Even though you’ve automated your payments, I recommend email notifications so that you are reminded when bills are due and when they’ve been paid. If you don’t want to get bombarded with emails, consider setting up a separate account to receive these sorts of notifications, or sign up for Unroll.Me, a nifty tool that batches emails of your choosing into a single daily digest.
- Keep a close watch at first. After you’ve automated everything and figured out your schedule for autopay, keep a close eye on your payments. You’ll only have to do this for the first month or until you are sure everything is going smoothly. You can also use this time, in the beginning, to tweak your autopay schedule if need be.
- Retain a small buffer. Even though you may not need the extra cash in your checking account, it’s always a good idea to have a bit of a buffer. This way if your gas bill is a bit higher than usual during the winter, you will have sufficient funds to pay the larger scheduled bill.
- Don’t forget your savings goals. If you’re just getting started on your savings goals, it’s easy to get tangled in a web of paralyzing questions, such as how much can I afford to save? And, what if I don’t manage to pull it off? Just chill. Know that the worst thing that can happen is that you bit off more than you can chew, and just need to scale back some. I would suggest starting with small goals. And remember: Chime makes it easy to automatically start saving money with every paycheck so you can achieve your financial goals faster.
There you have it: The beauty of automating your finances. It’s simple, it’s painless, and it can even be fun. Most importantly, by automating, you’ll fare much better with your savings goals. So, are you ready to get the wheels in motion and start today?