Wouldn’t it be so convenient if everything was automated and happened on autopilot mode?
Wouldn’t you want to take your mind off some to-dos and let them happen systematically on their own?
Your salary automatically comes into your bank account on the first day of the month.
So why don’t you set up a system where most of the tasks on your personal financial journey are automated?
Automation will make your life so much easier, because you won’t have to rely on discipline to pay bills, avoid late fees, interest charges or reductions in your credit score.
Every month as your pay-check comes in, let your finances work on autopilot.
Below are a few automation hacks that I’ve incorporated into my lifestyle:
- Set aside money as Savings – transferring that fixed amount out of your account as soon as your pay-check comes based on your budget and financial goals.
My account is set up in a manner that every month once my account is credited with my salary, a certain sum of money moves to another bank account to which I don’t have easy access. I haven’t taken any credit or debit cards on that account.
It just means that I won’t have access to that account when I’m having a bad day and I’m leaning towards retail therapy to fix my mood. Isn’t impulse shopping a major reason that leads to dents in our bank balance? I know we’re all guilty of that.
- Set up automatic payment of your credit card bill in full on its due date. This way you will never have to incur interest fees or late payment charges.
There has been only one instance in my 7 years of using a credit card where I missed a payment on my bill and that late payment fee hit me hard. I did get the bank to credit back that fee last month but that’s a hack or another day 😉
Ever since I have adopted a couple of credit card habits that I stick by whatsoever.
- Set up SIPs to automatically have your money Invested in the stock market through whatever instruments work for you based on your risk profile.
I’m not much of an investment geek and I frankly don’t know too much about the stock market. What works best for me is investing in Mutual Funds.
Each month my account is debited based on the schedule I set up and my money gets invested. Who doesn’t like seeing money make money with minimal effort?
- Auto Sweep Facility – You have been within your budget and your savings account has a lot more money than you need. That opens up scope for some reckless spending. What you can do is opt for an auto sweep facility. What this means is that when your savings account reaches an upper limit on the available funds (obviously set by you), the extra amount is transferred into a Fixed Deposit linked to your Savings account. You benefit from the interest rates of the Savings account as well as your FD account. The benefit of this is that unlike other FDs, this does not have a lock in period, so when you are in need of an excess amount into your Savings account, you can transfer it back.
- Bill Payments – you know you have to pay rent for your apartment, or salary to your house help every month. Won’t your landlords and your helps be as glad as you are when they receive their “income” on the same day of the month without any missed payments. You can also setup automatic payments for your subscriptions and your telephone bills or tuition fees for your kids.
When you automate your finances, you will know exactly the amount left in your account that is available to spend. It will help you automatically manage your money, you will be guilt free and limit your chances of reckless spending.
You can plan your budget accordingly with a freer mind, since you won’t have to stress about mandatory bill payments or worry about savings. Moreover, you’ll never have to encounter embarrassment for those missed payments or bear a loss due to unnecessary financial costs and your credit score remains impeccable.
Once it is set up, you won’t have to worry about it again.
It just happens, like clockwork. No discipline. No remembering. No worries.
However, the downside of automation is that you don’t have to think about it. So, don’t forget to check in once every month and review where your money is going.
Automation helps to ensure those repeatable and dependable processes that need to happen every month, happen. Who doesn’t like one less thing on their To-do list.
“What to do isn’t the problem, doing it is. Most of us know what to do, but we just don’t do it.” – Dave Ramsay.
So, what are you waiting for? List down all the transactions that you can automate and let your systems work for you.