Life can be hectic sometimes, and we can lose track of things on occasion. Don’t let your finances be one of them! The best way to be aware of where your money is going and when is to keep up with a budget. You can track how much money you have coming in each month, and what you’re spending it on. Are you taking care of all of your priorities, or are you guilty of too much unnecessary spending? Are you paying down your debt? Are you saving enough, or could you put away even more? How can you tweak your costs to get the most out of your money? These are just some of the questions that budgeting will answer for you!
Budgeting is sometimes about give and take, and learning from mistakes. Once you find a formula that works well for you, stick with it! This is where automating some of your money goals can come in handy – it helps to take the guesswork out of spending, and you’re less likely to forget about doing it if it’s already being done for you. I’ve included a just few things that most people (myself included) generally set on autopilot, which helps to keep you on track without much thought. Try it out and see if you notice a difference!
1. Savings – I used to be HORRIBLE at saving money. If I saw it in my account, I spent it freely, and I learned the hard way about the importance of saving. After working out my monthly budget, I was finally able to figure out how much I could comfortably save while still having a little spending money for myself. I wasn’t feeling deprived, AND I was watching my savings account grow! To be sure to keep myself on track towards the savings goals I wanted to reach, I set up my bank account to withdraw a certain amount from each paycheck before the rest was deposited into my checking account. Before long, I realized I didn’t even notice it was gone! This is an especially great idea if you have some long-term goals in mind, like saving for a new house or another large purchase that’s important to you.
2. Debt repayment – I take advantage of automatic payments on my student loans, and I’ve benefitted greatly! Not only have I received a few awesome perks (free money credits for paying on-time consistently and reductions in interest rates), but I’m also paying off my loans faster than I would have ordinarily. I’ve set up my payments to included just a little extra each time, and I’ve knocked a whole year off of my repayment term. Since these payments come out of my account automatically every month, I never have to worry about missed payments, late fees, or added interest.
3. Retirement fund – This one was tricky for me, since I’m not always the best at thinking long-term. I’m also lucky enough to work for a company that contributes significantly to my retirement fund, and I don’t have to do much else. Ideally, you should try to contribute as much as your employer will match, but even starting small is better than nothing. Similarly to having money taken directly out of your pay for savings (mentioned above), contributing this money before it even hits your account will make you less likely to notice that it’s missing. Your future will thank you later.
4. Other common bills – Think about fees you’re charged monthly – cable and internet, cell service, insurance, etc. Many of these services offer auto-payment options now, and sometimes you might have the option to set up payments through your bank account, as well. Setting these payments up to happen automatically again means no late fees or additional charges. And it’s one less check you have to mail every month!
Have you tried out automatic payments? Has it made life easier or more difficult for you, and how so?