Spending money can be fun, but the short-term gratification you feel from it could hurt your future finances. We get it: saving, investing, and sticking to a budget takes discipline, but you can make things easier with a little digital automation.
What’s automation? It’s saving more with less effort. It’s automatically putting away money for your financial goals, like retirement, paying off bills, or taking a big trip. It’s working smarter and not harder, and not leaving things to chance and memory.
Here’s how to automate five financial best practices.
1. Save little by little
Every paycheck presents an opportunity: to save or to spend? Make this a nonchoice by setting up direct deposit and autodraft.
Often, you can have a percentage of your salary automatically deposited into a savings account each pay period. This way, you won’t forget about—or procrastinate on—manually transferring some money into your savings.
If your employer doesn’t allow allocating your direct deposit across multiple bank accounts, connect with your banker. Tell them the dates you get paid and ask for a portion of your pay to be transferred into a savings account the next day.
Your money will be saved before you even know it’s missing.
2. Autofund your retirement
According to American Benefits Council, over 100 million Americans participate in a 401(k) plan,1 a retirement investment plan that can be automatically funded every paycheck. The big win here is that you do not pay income tax on your steady contribution, which keeps more money in your pocket while allowing you to invest in your future.
If you are lucky enough to have an employer that offers a 401(k), be sure to take advantage and confirm you are automatically contributing as much as you can every paycheck—especially if your employer matches your contribution. You’ll be surprised how much it can add up over time.
3. Track your expenses
Budgeting—and sticking to your budget—can be a difficult skill to master, but tracking your expenses can help. And if you’ve read this far, we hope you’ve learned something: You can do this on autopilot.
There are a lot of free apps you can use to keep an eye on your budget—PocketGuard, for example, is one. Budgeting apps like this can help aggregate and categorize all of your spending and show you where you’re spending too much each month.
If apps aren’t your thing, try using only one debit or credit card for a whole month. At the end of the month, review your bank statement and see where you’re spending, how much you’re spending, and if you can eliminate any unnecessary expenses.
If there are certain categories where you consistently overspend, try using an app or account tool to be notified when you are nearing a limit or over budget.
4. Pay bills automatically
Say goodbye to (most of) the stress of paying bills with a few clicks. Set up automatic monthly bill pay, and pick a payment date that works for you, like right after payday. This is most helpful for recurring bills that always charge the same amount, like rent, mortgage, or a student loan. By setting this on autopilot, you can pay your major bills sooner in the month, ensuring you don’t overspend before key bills are paid.
5. Check in with your finances
Digital tools can make your financial life easier, but when it comes to your money, you can’t simply “set it and forget it.” Take some time every month, quarter, and year to review your spending, savings, and budget. Put a recurring meeting on your calendar as a reminder. See where you can cut costs or invest more, and confirm the bill amounts that you autopay have not changed.
Make a change. One good habit at a time.
If you’re ready to put all this into practice, don’t get overwhelmed. Make a goal (and an auto-reminder) to set up one financial automation per week over the next five weeks.
Automating your simpler financial habits like this can reduce the stress of managing your money, and you’ll hopefully feel more in control.
Over time, you might just start to see a slow, steady progression toward your goals, all quietly happening in the background.