The recent advances in financial technology have made it a lot easier for people to become rich.
Even with the emergence of helpful fintech tools that save us time and money, a lot of people are still drowning in debt and aren’t saving enough for retirement.
One answer to consider for this national financial crisis is automation. When we take the decision of paying down debt or saving for a rainy day completely out of our hands and give it to a steadfast computer program, our opportunity for success can rise significantly. Let’s explore seven ways automation can not only help you survive, but thrive, financially.
Pay the Bills
Instead of waiting for the bills to come to the house and letting the papers stack up, automate the process so you never miss a payment again.
Most companies offer some convenient online way to pay your monthly, quarterly or annual bills. Sign up on the websites of your home utility providers, cell phone company and any other regularly scheduled bill you have in your life. Update your settings for automatic bill payment and while you’re at it, go paperless with your statements. This will reduce the amount of clutter in your home while reducing the opportunity for missed payments and missed payment fees.
Boost Your Savings
It’s no doubt that spending money is more fun than saving money. That’s why it’s important to take the process of saving completely out of our hands.
Work with your employer’s payroll processor to add automation into the process by depositing a certain amount of your paycheck into a savings account. This way, you never even see the money and have a chance to spend it.
If your employer doesn’t offer this option or if you’re self-employed, you can set an automated withdrawal from your checking account on the first day of the month and have it deposited directly into your savings account. In what feels like no time at all, you’ll likely have a healthy savings account that could cover you in case of a financial emergency. Better yet, you might have enough to go on a nice vacation and not worry about accruing any additional credit card debt!
Eliminate Your Debt
If you’re struggling with debt and not able to live within your means, automation can help you break free and win with your money.
Use the automatic bill payment feature, but include additional payments to chip away at the loan principal much faster. If this feature isn’t available through the online system, call your loan provider and discuss with them your desire to automate the process.
Once you’ve eliminated one debt through your hard work and increased automation, take all those funds and attack your next debt using the debt snowball method. Before you know it, automation, dedication and patience could allow you to achieve your debt freedom.
Control Your Money
Cash flow management tools like Tiller allow you to easily track your monthly income and expenses. Their account import feature updates your account balances and transactions easily and automatically. For example, instead of manually tracking your credit card transactions each month, the transactions would be automatically imported into a Google sheet and categorized based on the type of purchase (groceries, gas, rent, etc.)
With this automation feature embedded in budgeting tools like Tiller, you’ll have a lot more time to grow your net worth and not worry about bothersome (and draining) personal finance tasks.
Grow Your 401k
Investing early and taking advantage of compound interest for your retirement savings is one of the best ways to become rich. The longer you’re in the market, the more time you have to grow your nest egg and your overall wealth.
Your workplace 401k is an excellent place to start. If you have the option to automatically contribute to a traditional 401k pre-tax, consider signing up today. And if you’re already signed up, think about increasing your contribution amount to grow your wealth even further. Some employers have a matching program where they provide you a percentage of your annual contribution. This is free money and should be taken advantage of if you’re able to.
Reduce 401k Fees and Rebalance
High expense ratios and 401k fees can eat away at your retirement savings. Not only are they counterproductive to your retirement savings, but they’re sometimes difficult to understand.
Affordable services like blooom take automation to the next level by examining your 401k account and making suggestions on fund alternatives to reduce overall fees. Additionally, they perform the important task of rebalancing your portfolio automatically so you’re not overly leveraged in stocks or bonds.
Invest in the Stock Market
Let’s say you want to dabble in investing, but you just can’t seem to find the money each month to get into it. This is a great time to have the power of automation in your corner.
Partner up with a low-cost brokerage firm like Vanguard and set automatic monthly contributions into a brokerage account. As you grow your account balance, consider investing in low-cost index funds that cover the broader stock market to diversify and build your net worth. Over time, your portfolio could grow and provide you a rich life (financially and personally).
What other ways can do you automate your finances? Are there other fintech tools that you trust to help you become rich? Let us know in the comments below.
If so, subscribe now for tips on home, money, and life delivered straight to your inbox.