Don’t Wait, Automate!

You got a promotion at work, you started side hustling, you got your tax return and you’re ready to celebrate! You pop the champagne, head out for a meal, and treat yo’ self. Besides, you can afford it now, right?

It’s easy to turn over our pockets at the end of the month and wonder where that hole came from, you know, the hole where the money burned right through.

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I am not an automater by nature. I have different passwords for all of my accounts that I keep track of in my head. I like to pay my bills in lump sums and try to never sign up for autopay options. I like the control. I tend to invest in large lump sums once I notice my savings account getting too big.

I’ve slowly been changing this. My rent payment is finally automated. I scheduled a monthly transfer to invest. All of my credit cards are set to pay off in full prior to their due date. Human error is almost taken out of the equation completely, and I can start to be hands-off, letting the accounts grow with no effort from me. I promised a friend to start using LastPass or some other version of a password manager so I can stop the madness of memorizing them all.

Step 1:  Decide where the money needs to go

Do you have high-interest debt? A car loan that’s weighing on your mind? Maybe you have a high-interest savings account (I personally bank with ally which at the time of writing has 1.65% APY) to put it away in for an emergency fund, or a brokerage account because you’ve started to invest.

Step 2:  Double check rates for transfer, potential fees and/or pitfalls

My savings account has a limit of 6 transactions per statement cycle, so I usually automate payments from my checking account, but do a lump sum transfer from my savings account.

Step 3:  Take a couple of minutes and set it up.

You don’t have to do it all at once. Start with one bill, or with automatic investments from your paycheck. Slowly work your way towards fully-automated finances.

Step 4:  ??? Profit.

Psychologically, money we didn’t anticipate earning becomes “extra” money and is so easy to spend. Funnel it towards paying off debt, or squirrel it into a high-interest savings account, and you will never miss it. If it helps, think of it as paying future-you. Future-you is doing their best, working their hardest, and will thank you for all your hard work.

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