When it comes to managing your money, technology has made it much easier to keep track of your finances. Most financial institutions feature online banking, which allows you check your account balance and monitor transactions from the comfort of your home. Additionally, it is a simple matter to transfer money from one account to another. And, thanks to direct deposit, you rarely have to see money in any sort of paper form — check or cash.
Technology has also made it easier to automate your finances, from paying bills to padding your emergency fund, you can take care of a lot of your expenses digitally.
Items that can be Automated
There are a number of different financial transactions that you can automate to make matters more convenient for you:
- Direct deposit: Your paycheck is automatically deposited in the account of your choice. Many companies also allow you to have some of your check directly deposited into a retirement account and/or a savings account.
- Automatic transfer: You can also schedule transfers so that money is automatically moved from one account to another. For instance, you set up a transfer for the same amount of money on the same day at each month.
- Automatic bill pay: It is possible for you to arrange to have bills automatically paid from your account. You can set up to have a car payment, mortgage payment or other regular payment automatically deducted from your account. Even many utilities will automatically deduct what you owe.
Advantages of Automating Your Finances
There are some advantages to automating your finances. When you have your finances automated, it can help make things go more smoothly with your money. With bills automatically set to be paid, you don’t have to worry about remembering to send a check — and you don’t have to worry about it being lost in the mail.
Automating your finances can also help you when it comes to your savings plan. When the money is automatically put into savings, either from a paycheck or through automatic transfer, you don’t have to remember to move the money. It happens on schedule, and your savings builds up regularly.
When you have your finances automated, you don’t have to worry about whether or not your bills will be paid while you are on vacation, and you don’t have to worry about how early you mail the payment. It can take a lot of the stress out of your finances, and ensure that everything happens as it should.
You do need to be careful with automating your finances, though. You have to make sure that there is enough money in your account when the bill payment day arrives. In many cases, your payment will still go through, but you might end up with overdraft charges. Worse, though, is if your payment doesn’t go through and you end up with any number fees. So it is important to make sure your automatic payments work well with your income schedule.
In the end, automating your finances can be one way to improve your cash flow system. It doesn’t work for everyone, though, so you want to make sure that it is a set up that is likely to work for you.
{ 1 comment… read it below or add one }
Yes! Before I started automating my money, I was BROKE! Then I figured out that this system was the solution to my money problems, essentially. It’s the perfect system for me, since I am always ready to justify any kind of spending that comes to mind! Now, my money is automatically deposited into different accounts, and transfers are scheduled between them, I set it up so all by monthly bills come out of one account, and all my spending money comes out of another, and so on. I never have to worry about not having enough money in any account for any of my bills, and I just use my spending money account each week until it’s used up. When there’s no more money in that account, I just can’t buy anything for a day or two. It’s the BEST! I wish parents would teach this system to their teens and show them how to manage their saving, spending, giving, and investing this way. Imagine a lifetime of well-managed money!
Thanks for this post!