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Save time by automating your finances

Most people either run for cover when they start hearing personal finance advice because it’s viewed as complex and dull. Personal finances do not have to be complicated, frustrating, or even time-consuming. In fact, people that have control of their personal finances do not spend much time worrying about them. Their accounts automatically invest, save, and manage themselves with a limited amount of maintenance.

Automating your finances provides a couple of advantages to maintaining them manually. The obvious benefit is that it is a no-hassle solution. There will be no more moving money between accounts, paying credit cards online, or writing checks for rent. The other advantage automation provides is that you will never forget to make a payment and risk receiving a late fee. Whether you are partying on the Jersey shore or attending a conference in Las Vegas, your money will still manage, save, and invest itself.

Many of the advantages of automating your finances come about when you are out of school, working a steady job, and have several monthly payments. However, many of these saving and investing strategies are relevant to students as well. This process can be accomplished easily online in a couple of hours and requires only a few simple steps:


1. Set up direct deposit with your employer so that your paychecks appear automatically in your checking account. By now, this is a very standard process and is mandatory in many companies. If you need any help, speak with your employer’s human resources representative.

2. Enroll in a 401(k) account which automatically removes money from your paychecks (before taxes are taken out) and places it into a retirement account. This process is also very standardized with most employers to encourage you to save for retirement. If possible, contribute the full amount such that you take advantage of any employer-match benefits (speak with your human resources representative about this).

3. Set up automatic payments to a Roth IRA account. This can be set up easily on the investment account’s website. Simply link your checking account to your investment account and tell it to contribute a specific amount per month (up to $5000 per year).

4. Set up automatic payments on all credit cards. To simplify this process, try to pay as many expenses as possible with credit cards. For instance, check to see if you can use a credit card to make student loan payments, car payments, rental fees, utilities, and any other monthly cost you have. Go to your credit card’s website to create these automatic payments by linking the credit card to your checking account. Next, select an “automatic bill payment” option which will remove money from your checking account to pay off any credit card balance each month. If you are nervous that you might accidentally pay for an illicit purchase from your credit card, just be sure you check all of your credit card statements. (The payment will not occur until a couple weeks after the statement.)

5. Create automatic bill payments with your checking account for any miscellaneous bills that cannot be paid for via credit. If your rent or utility fees cannot be paid via credit card, you can have your checking account automatically send a check to your landlord or utility company. This can be done in five minutes on your checking account’s website.

6. Set up automatic deposits into your savings account to ensure that you do not forget to save for those important purchases. For instance, you can have your checking account deposit $20 per month into your “Christmas Presents” account, $50 into your “Travel” account, or even $1000 into a “Maserati” account. If you do not have a checking account that can do this or a savings account that allows different sub accounts, consider switching to ING Direct, Emigrant Direct, or another online account.

7. Sit back and enjoy as you effortlessly save money, pay bills, and gain financial independence.


Think of this process as a financial assembly line. Money is automatically put into your checking account after a part of it is contributed to your 401(k) account. From your checking account, a certain amount is sent to your Roth IRA account, credit cards, miscellaneous bills, and savings accounts. The remaining amount in your checking account is used for guilt-free spending because you have already taken care of saving and repaying any debt. Any money that you then spend for fun will be automatically paid next month from your credit card. Although setting up this automation requires some up-front investment of time, you will save plenty of time and frustration later.

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