Saving money can be a daunting task for many. Things become frustrating when you have to actively budget, track expenses, and make more sacrifices. This is where you need to think about automating your finances. It would take out the effort of saving.
But how can you automate your finances? Here are some valuable tips that can help you with it. Once you automate your finances, you will have more time which you can spend to focus on better things in life. In other words, these hacks will boost your bank account without the blood, sweat, and tears.
Set Up Automatic Transfers to Your Savings Account
One of the easiest ways to save without thinking about it is by automating transfers from your checking account to savings. Decide how much you can afford to stash away each month. It can be $25, $100, or even $500. Once you get to know the amount, you should go ahead and set up recurring monthly transfers. Over time, those small amounts will painlessly add up.
However, there’s an even better method available to do it. You just need to have your bank or payroll provider directly deposit a portion of each paycheck into a separate account. It would be better if that account is a high-yield savings account. Then, you will end up saving more money thanks to interest. What you don’t see, you won’t miss spending. This makes saving entirely invisible for you.
Automate Bill Payments
Have you encountered penalties for not paying your bills on time? The good news is that it shouldn’t happen anymore. You will be able to automate all your bill payments.
Late fees are the worst money drain. Hence, you must ensure you pay all your bills on time. Avoid them by setting up automatic payments through your bank or utility/service providers. This prevents late fees and ensures you don’t accidentally spend bill money on impulse purchases.
While at it, scrutinize those bills and call companies to negotiate better rates. Shaving a little bit off each recurring bill quickly compounds into significant savings each year. Then, set and forget those new discounted bill payments. Ensure you select a funding source with enough money for the automatic bill payments. This can be your primary checking account.
Invest On Autopilot
Investing is one of the best methods available out there to build wealth. However, it can also consume a lot of time. That’s where you can think about investing in autopilot mode.
Once an emergency fund is established in your savings account, it’s time to put your money to work harder. Automated investing allows you to bypass the stock picking and let the professionals do it for you.
Robo-advisors like Betterment provide optimized portfolios. You need to take the most out of available features, such as automatic dividend reinvesting and portfolio rebalancing when using robo-advisors. Moreover, you can also use them for tax loss harvesting services for minimal fees.
Set up automatic transfers from your bank account into these investment accounts, even if it’s just $20 weekly. Through the power of dollar cost averaging and compound growth, even negligible, consistent contributions can grow into serious wealth over decades.
The key is consistency and ignoring short-term market swings. Keep funneling any amounts you can afford no matter what, and let time work its magic; it’s risk-free.
Use Cashback and Rewards Credit Cards
Most people consider credit cards as traps. But if you know how to use credit cards responsibly, they can help you automate most of your finances. It may seem counterintuitive. However, cashback and rewards credit cards can automatically help you save money on your everyday spending. The key is to pay your balances in full each month to avoid interest charges.
Use your credit card for necessary purchases only and pay with your debit card when tempted by impulse buys. This way, you earn cashback or travel rewards for routine expenses like groceries, gas, dining out, etc.
Many cards offer sign-up bonuses worth hundreds of dollars if you spend a certain amount within the first three months. Be sure to pick a fee-free card tailored to match your spending habits. It may take time to look for credit cards and choose the best. However, the time you spend locating the right credit card would be an excellent investment that you can make in the future.
Set Up Automatic Price Tracking
How many hours do you spend every month looking around for deals? Sometimes, the time you spend spotting an agreement is not worth it compared to the discount you are getting. This is where you should consider automating the process of finding deals.
You no longer need to waste time scouring the internet for the best deals. Browser extensions like Honey automatically apply the best coupon codes at checkout.
CamelCamelCamel and Keepa let you see price history graphs on Amazon to tell when prices hit all-time lows. Paribus is an app that scans your email receipts and automatically requests refunds when prices drop after purchase.
These tools do all the savings legwork for you behind the scenes. All it takes is a single initial setup. Then, you can continue to automate your finances with these apps. When you have enough money, you will be able to withdraw it in the form of cashback or gift cards.
Final Words
It doesn’t take massive effort and sacrifice to boost your savings substantially. In fact, the most effective approach is putting your money on autopilot wherever possible through automation tools and passive investing. This frees up mental bandwidth to focus less on penny-pinching and more on pursuing what brings you joy. The savings will come effortlessly over time.
