Automate Your Finances


And Watch Your Savings Grow

By Michael Hardy

I am a professional financial planner, but I’m also just a guy who has to pay his own bills.  And speaking from personal experience, automating your finances is a fantastic tool that allows you to basically create your own “personal virtual accountant”.  Sounds fancy, but it’s actually Fabulous & Frugal!  Automating your finances will keep you organized, efficient and can help you build wealth and secure your financial future.

Go On Autopilot & Save!

Six months ago, I literally changed my life when I stopped writing checks.  By taking a couple of hours to input my bills and link them to automatically debit my bank account or charge my credit card on a certain date each month, I no longer worry about late fees or that I will spend my monthly savings before getting around to transferring it into the proper account. Going on ‘autopilot’ has helped me manage my cash flow, stick to my monthly budget, and by creating a consistent pattern and disciplined approach to savings, I am now able to more easily build my long-term wealth and increase my NET WORTH!  And the best part of this time ‘freeing’ decision is just that – it’s FREE!!

internet_bankingOrganize Your Bills & Savings Plan

  1. Make a list of all your bills and all your savings accounts (yes, we are assuming you have savings accounts!): IRA, emergency fund, vacation fund, etc…
  2. If possible, choose a date that you would like to pay all the bills in one lump sum each month. For me, I found that the first of the month works best, so I can start out the month feeling organized and guilt free.  However, if you receive a weekly or bi-weekly paycheck, it may be more efficient for you to arrange your bill payments in two cycles to better accommodate your cash flow (the bills that must be paid on the 1st of the month and those that can wait until the 15th).
  3. In either case, you may need to request to change the due date of your bills, which can be easily accomplished with a phone call.
  4. Set up BALANCED billing with your utility companies for consistency sake. {For example, this means calling your gas company and asking them to average your bill for the year so you can pay in equal monthly installment- eliminating any surprises! You can do the same with your electric & water bill.}

Set Up Your Direct Debit or Electronic Fund Transfers (EFT)

  1. Online Banking & Bill Pay. Simply set up EFT’s from your checking  or savings account to the company being paid. For example, HSBC has a Bill Pay Function online that allows the money to transfer from HSBC checking/saving to the third party each month “automatically”. You set up the payment for any frequency you would like including weekly, monthly, quarterly, etc. and for as long as you would like.
  2. Automatic Credit Card Charge. Another option to reduce your number of bills, is to have expense directly debited from your credit card on a monthly basis. This may be the best option if you are paying a bill that may fluctuate from month to month. It might also be smart to use your credit card if you get bonus points or airline miles for using it. For example, I know my VISA card offers points for any purchase I make with my card. Those points can be redeemed for cash, airline discounts, etc. Important! This is only an option if you pay your credit card IN FULL each month to avoid ALL interest payments.
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