In 2017, many parts of our daily lives are automated. From automatic faucets in public restrooms, to automatic parking assist in fancy cars, we love to have things done for us and not have to spend the time or worry to do these things manually. So if we’re automating most technological parts of our lives, why don’t we do the same for our finances?
What You Should Automate in Your Finances
By automating your pay check, you’ll see it in your account the morning of pay day! This is a sure way to receive your pay in a timely manner, and you don’t have to worry about losing a check! I fully suggest everyone sign up for direct deposit with their employer.
Also, sign up for automatic payroll deductions when it comes to contributing to your employer retirement savings plan. You can have your 401(k) contributions come directly out of your pay check and you will therefore have an easier time saving. If the money never gets to your hands and you don’t see it leave, you won’t miss it! Instead you’ll get in the habit of budgeting for your take home pay, all the while building your retirement savings.
There are two very important reasons that you should sign up for automatic payments when it comes to your student loans. 1. You’re going to be paying at least the minimums monthly anyway. Why not stay on top of it and get it paid automatically? You’ll never deal with a late payment. 2. Signing up for automatic payments can lower your loan interest rate. When I signed up for automatic payments on my student loans (private and federal), my interest rate was lowered by .25% percent. Not huge, but anything lower is worth it, and it’s so easy! I also received another .25% interest rate decrease on my private student loan just for sending in a copy of my diploma to prove that I did in fact graduate from college. Signing up for automatic payments here will keep you organized and can also give you a nice reward!
Savings is an important part to your financial well-being, and the second thing you should do with your paycheck (after giving or tithing). You can work with your bank/credit union to set up an automatic savings transfer. This way you can automatically have a set amount taken out of your checking account and transferred to your savings every month. Similar to saving for retirement with automatic payroll deductions, you won’t miss this money if you never see it. Setting up automatic savings transfers will establish a good habit of saving and honestly won’t feel like you’re missing anything.
Almost all monthly bills can be set up with automatic payments. Rent, Internet, electric, phones, insurance, credit card… All can be withdrawn automatically. My personal motto is to make it automatic if I can. This way I never forget to pay a bill on time. I like to utilize this system for my advantage, and it helps me stay more on top of my finances. Just make sure you have written down the dates that everything gets automatically deducted, and that you have the money to cover it in the bank! Also, just because you set up automatic payments doesn’t mean you can be lazy. You still need to be tracking your spending to make sure that what’s taken out really is correct, and make sure that all of these items are still within budget!