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Automating Your Finances

Automation is often equated with greater efficiency. This is absolutely the case when it comes to automating your finances. There are few other personal finance strategies that can help you so much through expending so little effort. These are a few of the top ways automating your finances will change your life for the better.

Why Is Automating Your Finances a Good Idea?

It’s smart to consider the implications of automating your finances before making any big moves. Doing this, however, can be a huge benefit to your life in many ways. Automating your cash flow makes your life easier. But it can also save you money when done the right way. That second point should really have your attention.

There are actually a few helpful applications for automating finances. These range from automating savings to credit card payments. This is how some of the most common forms can simplify your life.

Utilize Direct Deposits 

Direct deposits are common in today’s day and age. This is where your paychecks are immediately put into a checking account instead of you receiving a physical check. There are a few reasons why direct deposit it so great. First, it’s convenient for you. You don’t have to do any work after the initial setup. There are further benefits such as receiving payment even if you can’t receive a physical check, no additional costs to you, and immediate availability of funds.

Along with direct deposit, you can automate your paychecks to various other savings accounts. There’s no limit to how you do this.

For example, you can instantly deposit a set amount of your paychecks into a separate savings account for emergency funds. This will help build a cushion into your finances in case you lose your job or need to pay an unexpected expense. You can apply this same concept to investment accounts. Consider automatically putting a certain amount of your money into a 401(k). Even if it’s a small amount, that can add up to a lot in the long run. But you need to create a budget before you decide how much you want to designate into these various accounts.

Find the Right Budgeting App

Creating an effective budget has never been easier. In the past, you had to do it entirely by hand. This meant keeping track of every expense by hoarding receipts, then adding it all up to see how much you’re spending each month. Thanks to developments in technology, you can now automate your budgeting by using apps. These are super convenient tools for monitoring your spending while also getting ahead on saving.

There are certainly a lot of financial apps in the marketplace today, which cover a wide range of purposes. Some of these apps are much better than others. It’s tough to say what the best budget app, since everyone is looking for something different. However, Clarity Money certainly makes a case for being in that conversation. It’s a well-rounded app that allows users to track expenses—and even suggests subscriptions to cancel if they’re largely inactive. There are also several ways to automatically save money by creating various accounts and saving schedules.

Automate Bill Payments

There’s another keyway you can automate your finances: bill payments. Whether it’s your rent, mortgage, or credit card bill, you can have these expenses automatically deducted from your account each month. What’s the advantage of doing this? For starters, you won’t miss a payment, which can land you with an additional late fee. Plus, you’ll save a bunch of time if all your bills are paid automatically every month.

It’s important, however, that you don’t set up an automatic bill payment schedule that doesn’t work. Over-drafting your account typically leads to a decent fee. It can also be bad for your credit. If you accidentally allow your account to get overdrawn, turn off automatic payments until you get things back under control.

Automating your finances can be a big time and money saver when done correctly. Look into some of the ways this can benefit your life. As always, take time to do some research, and ensure you’re in a situation where automation makes sense.

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Erin Thompson

Erin Thompson spent years managing her own blog about budgeting and debt. Because of that, she has great insights not only about managing spending and borrowing but also about running websites profitably. When she's not writing articles for us, she's traveling and looking for new types of wines to try.
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