You work hard to make your well-earned money, but when it comes to keeping track of your recurring monthly bills, savings, debts and retirement accounts, you may find it incredibly difficult to keep track, which isn’t good for your financial health. The good news, however, is that you can easily automate your finances so that you don’t have to worry about making all the deadlines on your accounts. Automation means that you place an automated system on your account that takes care of money management tasks that you would otherwise have to do yourself. Essentially, it involves putting an automatic transfer in place from your checking to your savings each pay cycle, which allows you to never have to pay your bills manually again. Here are five reasons why automating your finances will make your life easier.
1. Reduces the Chances of Human Error
If you forget to pay a bill on time, you’re going to be hit with a major late fee and if you accidently spend money that was supposed to go towards rent, you may find yourself in a sticky situation. Humans are prone to error and even the most organized tend to forget things every once in a while. Unfortunately, when it comes to your finances, there isn’t much room for error. When you choose to automate your finances, you instantly remove the human error component. You don’t have to think twice about putting money away each month to pay your bills on time. It just happens automatically.
2. It Makes You More Frugal
We’ve all had those moments when we choose to spend our money unwisely, whether it’s to pay for an expensive dinner with your rent money or buy an expensive gadget with grocery money. However, automating your bill payments and savings forces you to be more frugal as you’re only given a certain amount of money every month to go towards extra expenses. When you want to buy an expensive dinner or toy then you’ll have to get creative if you want it instead of just taking it out of an account meant for something else.
3. It Gives You Assurance
When it comes to unexpected expenses that come up such as having to pay for a broken car or roof repair, then automating your savings account can help you do so. When you set aside money each month for your savings account, you can start also putting money into an emergency fund that will help to cover any extra costs that come up without having to dip into your budget.
4. It Helps Stop Temptation
When you automate your savings and bills, you’re taking money and putting it in a place that is “out of sight, out of mind.” Doing so makes it a lot easier to avoid temptations that you face when being lured by a purchase. If you can tangibly see money in your account, then it’s a lot easier to talk yourself into using it to purchase something you want. However, you can’t spend money you don’t have. Putting it in a place you can’t see it will remind you that it’s meant for other things.
5. It Allows You to Not Feel Guilty
When you automate your finances, you know the exact amount of money you have that is meant for spending. This allows you to splurge on the items you really want or go out to a few fancy dinners without feeling guilty or worrying that you’re dipping into your rent money. It’s quite a nice feeling when you’re not having to worry about such things when you want to enjoy yourself.