3 Tips To Automate Your Personal Finances

Monday, June 23, 2014, 1:00 AM | Leave Comment

These days, most banks – including your neighborhood bank – offer online features and benefits that you can take advantage of to automate your personal finances. In my family, we have automated three areas and you could do the same. First and foremost is savings, then you pay your bills online and the third one is investing. It saves us time and some money as well.

For the latter, you can use a part of your savings. Or if you can really budget your finances, then after saving a minimum for a rainy day and online bill payment, you can invest the leftover if any.

Automate Your Personal Finances

Your goal should be to make things easier for yourself and in the process save and invest to grow as well.

  1. Saving

    Whatever your source of income is – most probably your paycheck, set up a process, a procedure, with the help of your Human Resources (HR) to make direct deposit to your checking account. Set up a threshold of your total expenses – fixed and variable. Anything remaining above the threshold, with the help of your bank, have it transfer to your saving account automatically.

  2. Online Bill Payment

    We bank at TD Bank in Massachusetts. They have branches all over the east coast, from New England down to Florida. The bank used to charge us $6.95 a month. It has been a few years now that they have made it available to their customers free of charge. [Online Banking Sign Up].

    Whenever I receive a bill, the same evening, I log in and schedule payment 5 days before the due date. That’s what the bank advises to do. They prefer at least 5 business days. I pay all bills online including credit cards.

    If the recipient does not accept online payment, then the bank issues a check to the company – just an ordinary check – and sends it to them via surface mail all for free. For the vendor, it acts like a certified check because the bank debits your checking account before it sends out the check.

  3. Invest to grow your money

    When you are done with your initial saving and bill payment, then you can use the leftover as your investment money. You can set up with your bank and they will automatically transfer the money every month to your investment company. We use Fidelity Investment. Dollar-cost averaging – a key to success when investing is one method you can use [for us it has proven to be extremely good method].

    You can invest to create assets for now and future especially for your retirement. 401(k) plan first comes to mind. Try to contribute, at least, as much as possible to receive any matching your company will give you. Your company’s matching is free money for your investment. If you can spare extra, then you can either add to IRA or more to 401(k). Both are relatively easy to setup. Talk to your HR rep.

In a Nutshell
The automation in the said three areas will simplify your finances, possibly save you money and thus gives you an incentive to invest.

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