Between work, your family and household chores, you may realize there’s little time to manage your money. When you have a lot on your mind, it’s only natural to occasionally forget a due date. Unfortunately, late payments have costly consequences.
Creditors charge a late fee, and if payments are more than 30 days past due, there’s a good chance the creditor will report the delinquency to the credit bureaus. And trust me, you don’t want this to happen.
Negative activity damages your credit score, making it harder to get home loans or auto loans.
But there’s a way to avoid this headache; and if you’re searching for a better system, putting your personal finances on autopilot takes the stress out of money management. Besides, automation is an excellent way to never miss another due date.
Here’s a rundown of four things you can do today to automate your personal finances.
1. Sign up for direct deposit
If offered by your Texas employer, sign up for direct deposit. It’s a simple change that saves time. With your salary direct deposited into a checking or savings account, you don’t have to wait in long teller lines at the bank on payday, nor wait hours for money to credit your account.
Getting started takes absolutely no effort on your part. Simply notify your employer of your desire to participate in direct deposit, and then provide the payroll manager with your bank routing number and specific bank account information — it’s that simple and fast.
It might take a few weeks to receive your first deposit, but once you’re in the system, funds automatically appear in your bank account, usually at midnight on payday.
2. Automate your savings
Everyone needs an emergency savings account, but saving doesn’t come easy. It’s easy to make excuses, especially when you have too many bills and not enough income. And sometimes, we are so preoccupied with paying bills that we ignore feeding our savings account.
But you owe it to yourself to prepare for a rainy day. In fact, there are sound reasons to make saving a priority. For example:
- You can start planning for retirement early
- You can create a cash reserve, in case of a job loss
- You can keep your cash in a safe place and earn interest
- You can get a Texas title loan and pay it back easily
However, saying you’re going to start saving and actually saving are two entirely different things; and if you can’t seem to get your savings off the ground, putting your account on autopilot can jump start your cash reserve.
It might come as a surprise, but several banks and credit unions have programs to help you save. For example, some savings programs will round up your purchases to the nearest dollar and then deposit the difference into your savings account.
And if you have a checking account with Wells Fargo, you can enroll in the bank’s Way2Save program. For each debit card purchase, the bank deposits $1 from your checking into your savings — and as a bonus, these accounts earn a higher rate than regular savings accounts.
3. Don’t forget about retirement planning
You can open an IRA with a bank or financial planner to prepare for retirement; but if your employer offers an employer-sponsored 401(k) plan, participation is worth consideration.
A 401(k) makes saving for retirement effortless and simple. You don’t have to do anything but sign up through your company. Once you’re signed up, your employer deducts a set percentage from each paycheck. Yes, your paychecks will be smaller — but in most cases, you won’t even miss this cash.
All contributions are deposited into your account,where it grows for as long as you have the account. And depending on where you work, your employer may offer a match program, which is essentially free money.
Whatever percentage you contribute to your account, the company matches your percentage. So, if you contribute 3% of your income, your employer kicks in another 3%.
4. Automate your bills
From your energy bills to your mortgage payment, automating your bills is one of the best ways to put your money on autopilot. It takes time to sift through statements and write checks throughout the month. Depending on the number of bills you receive, a due date can slip your mind.
Fortunately, several banks and credit unions offer free bill pay — an important tool for automating personal finances.
After you’re enrolled in online bill pay, decide when to pay your bills, and how much to pay. Funds are automatically drafted from your checking account and transferred to your creditors or utility companies on the days selected.
Of course, for this method to work, funds have to be available in your account. To avoid overdraft fees — which can send your account into the red —pay bills one or two days after your paycheck clears your bank account.