7 Smart Tips for Automating Your Savings
Managing your budget effectively is crucial for achieving financial stability and peace of mind.
At Habit Money, we’re huge fans of bringing mindfulness to your money, which means checking your accounts and reviewing your expenses regularly.
That said, life happens – you go on vacation or have a busy month at work and you aren’t as diligent as you usually are. In these moments, it can be overwhelming to catch up, and automations can be a game-changer to make sure you stay on track with your budget, even if it’s not top of mind.
Leveraging technology to automate key aspects of your budget can save you both time, money, and stress. Here are 7 of the savviest automation tips for budgeting and saving that can take your personal finance game to the next level:
#1 Create Separate Savings Accounts:
To begin automating your budget, consider setting up separate savings accounts for different financial goals. By designating accounts for emergencies, vacations, or major purchases, you can easily track progress towards each objective. Automate regular transfers from your primary account to these savings accounts to ensure consistent progress and avoid the temptation to spend that money elsewhere. It also makes it easy to stay on budget if you see the amount in your primary account as what you have to spend – plus it’s guilt free!
#2 Leverage Autopay for Recurring Bills:
Avoid late payment fees and the stress of remembering due dates by setting up autopay for your recurring bills. Many service providers and banks offer autopay options, allowing you to authorize them to deduct the payment amount directly from your account on the due date. This ensures that your bills are paid on time every month, saving you both time and money.
Pro Tip: If you pay your credit card bill before your statement is posted, your credit card utilization will be lower, which has a positive impact on your credit score.
#3 Utilize Reminders and Alerts:
Stay on top of your finances by setting up reminders and alerts for important financial activities. Tried a 7-day free trial? Have a subscription that renews annually? Leverage calendar alerts or email reminders to notify you of upcoming renewal or due dates. By automating these reminders, you reduce the risk of missing payments or getting charged for things you don’t want. Plus, you let the technology do the remembering for you so you don’t have to!
#4 Try a Digital Budgeting Tool:
Take advantage of the wide array of digital budgeting tools available today. These tools help you track your expenses, categorize spending, and set budget limits for different categories. Additionally, they often provide visual representations of your financial progress, making it easier to understand your spending habits. Popular options for budget lovers include Mint, Copilot, and Monarch Money.
For those that are new to budgeting or need some extra help, Habit Money was built for you.
#5 Use Spending Alerts and Notifications:
Stay mindful of your spending habits by enabling spending alerts and notifications through your bank or credit card provider. These alerts can be set up to inform you when you exceed certain spending limits or when unusual transactions occur. By receiving immediate notifications, you can quickly address any fraudulent activity and maintain control over your finances.
P.S. Habit Money does this for you 🙂
#6 Employ Automatic Investment Contributions:
Investing is an essential part of building long-term wealth. Automate your investment contributions by setting up recurring transfers from your bank account to your investment portfolio or retirement accounts. This way, you can consistently grow your investments without the need for manual transfers, reducing the chances of forgetting or neglecting this important aspect of your financial strategy.
#7 Consider Robo-Advisors:
If you're new to investing or prefer a hands-off approach, consider utilizing robo-advisors. These online platforms use algorithms to manage and optimize your investments based on your risk tolerance and financial goals. By automating your investment decisions with a robo-advisor, you benefit from professional guidance and a streamlined investment process. Just be sure you do your due diligence ahead of time to ensure the platform is investing in alignment with your risk tolerance and values.
While automation is convenient, it's essential to regularly review and adjust your budget to ensure it aligns with your evolving financial goals. Set aside time regularly to evaluate your progress, review spending patterns, and make any necessary adjustments. This proactive approach ensures that your automated budget remains effective and relevant as your goals and financial situation evolves.
