Automation is one of the most practical ways to make sure your money goes where it needs to each time you get your paycheck. Here are just some of the ways to begin automating your finances and start taking control of your money.
Direct Deposit
This is one of the easiest ways to automate your finances. Instead of having to cash your paycheck, it’s automatically deposited into your checking or savings each time you get paid. Once you have direct deposit set up, this will make it easier to automate the rest of your finances.
Bill Pay
There are several consequences to not paying your bills on time. First, you have to deal with fees that cost you more money. Second, late payments can affect your credit score. Third, if you have a credit card and make a late payment on it, you may have your credit card interest raised to the penalty rate. By setting up automatic bill pay, you can avoid these penalties and not have to worry that a bill was paid.
Retirement Savings
If you have a work sponsored 401(k), you can set up money to be automatically deposited into your account every paycheck. Depending on the type of account you have (traditional or Roth) these contributions will either be taken out before or after tax. Check to see if your work has some type of match program so you can get the most out of your contributions.
Investments
Set up your deposits to go into your investment accounts automatically. Since every situation is different, it may be helpful to sit down with an investment advisor before starting any type of investment program.
