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Automate Your Finances: Save Time, Money, and Stress
In the hustle and bustle of modern life (car line, practice, dinner, gym, church, Bible study, need we go on?) managing finances can easily become a daunting task. In our experience, that means you often put it budgeting off and things tend to get worse. The best answer? Automate your finances.
167 | Automate Your Finances: Save Time, Money, and Stress – Financial Coaching for Women: How To Budget, Manage Money, Pay Off Debt, Save Money, Paycheck Plans
Automating your finances frees up your time. We once had a client who spent every Saturday morning with coffee and bills trying to figure out what was where and what was going on with her money. Boo!
Still other clients spend so much time avoiding or stressing about money! Automating your finances solves both of these problems. Reclaim your time, your energy and brain calories by putting things into motion so that your bank account acts like your personal assistant. In today’s post we’ll tell you how.
Today we’re walking through a few simple ways you can automate your finances including bills, spending, saving and investing.
We have an entire course on setting up a bills account if you’re interested. And a free podcast episode. Essentially, the idea is to create an account that is designated for bills ONLY. This account ONLY has income coming in and bills coming out. There is no spending happening in this account.
With that in mind, you set up all direct deposits (income) to go into the bills account. Next, you set up all bills to come out automatically via ACH or debit. Based on your budget, you transfer out any overage to savings or spending (keep reading).
The cool thing here is that you avoid late fees and overdraft fees. And, instead of 50+ transactions you’re trying to account for to see if you have money, you can look at this account and see exactly which bills have come out and, with once glance, know exactly what’s going on with your money. Payments are always made on time and, because you used your budget and did the math, there is always enough money in the account to handle it.
But what about the other things you spend your money on? Glad you asked.
We define spending as anything you spend money on during the month that isn’t invoiced / billed regularly. So, this is your gas, groceries, entertainment, personal money and more.
We suggest you also set up AT LEAST one, but maybe more, spending accounts. You can then automate transferring money to those accounts. For example, if your budget calls for $1000 in grocery money each month, you would transfer $500 each payday to your grocery account.
You will use your budget to determine how much you’ll transfer each payday. This is what we call a paycheck plan. (see below) You’ll set these transfers to happen automatically the day after you get paid. The best part is, you know every payday you have more money coming for the things you want to spend money on (groceries, gas, restaurants, personal spending).
Once you’ve got the bills and your monthly spending automated, you can start to automate saving money! Using your budget, you’ll see how much you can afford to set aside for different savings accounts such as Christmas, travel, vehicle maintenance, etc. Then, you’ll do the same thing you did with your spending.
Open up a separate account for each saving bucket (why not?). Then, set up automatic transfers to those accounts and watch your savings stack up automatically!
Investing with Automation
Once you’ve gotten all that down, you can go ahead and add investing automation. This is normally pretty easy if your employer offers a 401K program. You can have the money withdrawn from your paycheck before you ever even see it.
Once you’ve maxed out what can happen at work, you can set up a Roth IRA or different investment account and have the money withdrawn from your bills account each month.
We’re not financial advisors so we don’t advise anything specific. However, once you do decide, make it automatic!
Monitoring and Adjusting Automated Finances
Once you’ve got your systems set up, you can sit back and relax and watch as your bank account acts as your personal assistant! Hooray!
All you need to do is log in and supervise things happening. This might be something you do weekly in the beginning. Then you can move to paydays only. Finally, you might sit down and look over everything monthly.
Likewise, you’ll have to make some adjustments periodically. That’s okay!
If you’re tired of the stress and hassle of managing your finances manually, it’s time to embrace the power of automation. By setting up automated bill payments, allocating funds for savings and investments, and separating spending categories, you can simplify your financial life, reduce stress, and achieve your financial goals.
Automating your finances allows you to free up time to focus on what’s important, like spending time with loved ones, pursuing your passions, or reaching your professional aspirations. To get started, all you need is a budget and a bank account. With a few simple steps, you can transform your finances and enjoy the peace of mind that comes from knowing your money is working for you.
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We are excited to create the time & space to talk to you about your current money situation. This is a free, no-obligation call where we can answer questions you may have and maybe find some quick wins for your budget.
What do you have to lose?