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#110 | Automating your finances to create better financial habits

#110 | Automating your finances to create better financial habits

Fromfriends on FIRE


#110 | Automating your finances to create better financial habits

Fromfriends on FIRE

ratings:
Length:
31 minutes
Released:
Aug 16, 2021
Format:
Podcast episode

Description

Automating your finances can have a positive impact on your finances.  It can help you put certain tactics and behaviors on autopilot, creating simple habits that take almost no thought each week or month.  The less you have to think about remembering to do something, the better chance you’ll actually do it.  The benefits of automating your finances include:It saves you time to focus on other higher-thought activities, especially those activities related to your finances.It puts good financial behaviors on autopilot, increasing the chance that you’ll make positive money choices.  The less you have to think about it, the better you can do.  You’re essentially creating better habits with the click of a button!  We wish all habit-building was this simple.It allows you to pay yourself first.  When you get your money to where it needs to be quick, there’s less of a chance you’ll have a chance to do something “bad” with it.  It avoids human error on forgetting to do something or pay something.  Can help you avoid late fees or lost opportunity cost from forgetting to pay a bill on timeSpecifics ways you can automate your finances:Automate your savings.  You can set up automatic transfers from your direct deposit paycheck with your company or do it within your bank account online login.  For example, setup for $250 to be moved from your checking account to your savings account on the 1st and 15th of each month.  We suggest you increase your automated transfer to savings and investment accounts over time, even if it’s just small increments.  Small steps add up and build momentum.Automate your investing.  Same as with savings, you can automate transfers of money to your investment accounts and actual purchases of investments.  If you know this will help you, consider moving your investments to a platform that allows for automatic investing.  For example, platforms like Wealthfront and M1 have simple and effective auto-investing features and capabilities. Setup a 401-k auto-increase.  With some 401-k programs, you can set an increase to start on a certain date, which can help you hit an increased goal and perhaps not even remember or notice the impact.  Automate paying your bills.  You can sign-up for automatic payments on anything from credit cards to electric bills.  I prefer this as it saves me a ton of time and ensures I never miss a bill.  Automate tracking your expenses. Tools like Intuit’s Mint or YNAB (you need a budget) can help you automate your expense tracking vs. doing it manually.  Mike still does his manually thorough he might be in the minority here!  Maggie has done it manually but now uses Mint and then spends some time reviewing, cleaning up, and summarizing the data from Mint.Automate tracking your net worth.  We’re old school on net worth tracking, so we like to do this in excel, but do what works for you. We care more that you track your net worth and less about the how.  There are popular apps like Personal Capital that allow you to capture your net worth easily, and also, many investment apps like Wealthfront let you link in all of your accounts and easily see your total net worth. Unfortunately, these apps don’t do a great job at historical tracking. In addition, they often have issues with one account or a piece of real estate, so I like using these apps to capture all of your accounts faster but still manually tracking in an excel or google sheet each month.  Automate notifications about unnecessary fees.  Apps like personal capital or Mint are free and helpful in that they provide notifications on overdraft fees, late fees, and additional fees you want to avoid.  If you catch an issue like this early, you can quickly fix whatever caused it, and you can often call the financial institution and request they removed the fee.When in doubt, Siri can do everything and use her to improve your finances too!  Siri is pretty amazing.  You can hold down a button on your iPhone and say, “Siri, remind me on the 1st of ever
Released:
Aug 16, 2021
Format:
Podcast episode

Titles in the series (100)

?On a mission to get friends to talk about money ?Sharing our FIRE journeys, personal finance advice, and frugal tips Hosted by 2 Friends on FIRE - Mike + Maggie **Leave a voicemail or text us at: 404-981-3370**