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How to Automate Your Way to Wealth

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Checking different bank accounts, tracking when bills are due and keeping tabs on your budget and savings goals? Managing your finances can take up a lot of time – and let’s face it, isn’t the most fun use for it. No matter how busy you are, it is important to stay on top of your money to avoid incurring late fees, a damaged credit score or missed financial goals. Automating certain aspects of your finances can relieve some of the stress and pressure that goes along with money management. Consider the five methods below for simplifying good financial decision-making through automation.

1. Sign Up for Direct Deposit

You may have already set up a paycheck system that allows your income to appear automatically in your account on a specific day. Direct deposit not only saves you a trip to the bank, but also provides some peace of mind. To sign up, you usually only need to fill out a form with your bank account information. Sometimes, you can even split up the deposit over several accounts (think: some to your checking, some to your savings and some to your Roth IRA) making automated savings a breeze.

2. Enroll in Your Employer’s Retirement Plan

Saving for retirement takes discipline and determination, but investing in a 401(k) with your employer means the plan automatically deducts your contribution from your paycheck into your retirement account each time you get paid. You choose how much of your pre-tax pay to contribute and if the company offers a matching program, these funds will also be deposited automatically, helping to grow your retirement nest egg at a faster rate. Some companies even allow you to automatically increase your contributions each year to ensure you stash away according to any pay or time increase.

3. Set Up Savings & Investment Transfers

Some finances are easier remembered than others. It may seem easy to forget feeding your long-term goals like savings and investment accounts. You can establish automatic transfers from checking into a personal savings account by deciding what amount or fixed percentage of each paycheck you want in your savings accounts. Investment transfers can operate similarly with online brokerages that automate fund transfers to regular stock or mutual fund purchases.

4. Establish Online Bill Pay

There are so many monotonous bills that come each month like rent, mortgage, utilities and credit card payments. To make things easier for yourself, select a monthly withdrawal date and allow your providers to directly deduct these bills from your checking account. You may even qualify for extra benefits or discounts like loan interest rate reduction after becoming an auto-pay customer. This streamlines your financial records and helps you track any and all payment through your web account. Of course, it’s important to remember the dates you choose so you can make sure you have enough money in your checking account.

Automating your payments has an added benefit — you can avoid hurting your credit. Making on-time payments is crucial to improving your credit score. You can see how your payment history is impacting your credit scores for free on Credit.com.

5. Track Spending on Your Mobile Device

From budget help to investment tracking, there are many apps designed to help you manage your money. Some of these complex programs for your computer, phone or tablet can help you see exactly what is coming in and what is going out so you know just where you stand financially. They can save you time and cut down on errors (illegible handwriting, anyone?).

Automating your finances with these methods can really save you time and keep you on track. However, this doesn’t necessarily mean you should take a completely hands-off approach to your fiscal health and goals. It’s important to check your budget periodically and monitor your accounts to be sure everything is credited and paid as it should be.

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