As humans we are emotional creatures. There is just no way of getting around it. Even the most logical, “down-to-earth” people among us still base a good number of their decisions on how they react emotionally. While that can be a good thing for relationship building, it can be devastating for our finances. Fortunately, there is a way around those emotional decisions. Just automate your finances.
The Pros of Automating Finances
When you choose to automate your finances, you can make sure that your bills are paid on time, your savings goals are met, and you are making the most of your time and money. Getting everything automated is especially important when you are on the road a good portion of the month; no more fretting over late payments. Here are just a few of the benefits of making sure everything is automated:
No late fees
Let’s face it, those late fees can really add up. Even missing your payment by one day can cost you money. Miss it a few times per year and you’ve paid a few hundred extra dollars.
No missed savings
Every single person needs to have an emergency fund. But if we consistently forget to add money to our savings, then our emergency fund will never get to the point where it is enough.
No missed investments
We all have goals on when we want to retire. But if we try to time the market, or if we forget to put money aside, then those goals mean nothing.
No more worries
When it’s all automatic, you don’t have to even think about it. Just check it every 4 months or so to make sure everything is still good.
Cons of Automating Finances
Now there are some downsides to making everything automatic. However, they are pretty easy to overcome with some willpower.
No quick payoffs
If you automate paying just the minimums on your debts, you can end up paying a lot in interest charges. Automate the minimums, but then manually make extra payments when you can afford them.
No extra gains
Likewise if you automate just enough to meet your retirement goals, you will likely have just enough to retire. Most people would rather have more than enough, so manually invest extra when you have the money.
Yes, sometimes you can get late fees even when everything is automated. It happens when you cancel a credit card (due to an identity theft scare or something similar). Often the company won’t notify you that something didn’t draft properly, and you can still get hit with fees.
What accounts can be automated?
All of them. Every single account can be set up to automatically be funded or paid. You likely have your settlement check automatically deposited into your bank account, so you know when you’ll have the money in your account. Then, set up your bills to be paid shortly after that. If one of your bills won’t allow automatic payments, then you can often schedule it to be “pushed” out from your bank. Savings accounts, investments, and even charitable contributions can all be automated.
Have you taken the time to automate your finances? It only takes 30 minutes to an hour. You’ll save that much time every month with automation.