Why You Should Automate Your Finances
I’m not an early adapter of technology. In fact, I was one of the last of my friends to switch to an iPhone. I had a Twitter account for four years before I actually began using it. I'm still trying to grasp hashtags.
In its efforts to make our lives “easier,” technology often overwhelms and makes me feel discombobulated. It’s not that I hate change and evolution, it’s that I’m a technical dunce and the world’s worst Millennial. So it may surprise you to know I’m a firm believer in automating your finances. Over the last few years, I’ve learned to love using apps and technology to manage all of my money, pay my bills, and to track my spending. This is coming from someone who still owns an iPod.
Financial technology, when used properly, can make your personal financial situation far more efficient, effective, and less time consuming. I’ve found that automating your finances has more benefits than just “out of sight, out of mind” as well. Here’s a few reasons you should consider fully implementing an automated strategy to make your money work for you:
It’s a best practice
When you automate your savings, investing, and bill paying you will be doing what’s best for your money without evening thinking about it. If you utilize technology to automatically enforce good habits each month, you’re setting yourself up for a successful future.
Out of sight, out of mind - but still moving toward your goals
Working to achieve financials goals, both big and small, is a tedious process. We often lose focus and motivation because we are humans with tiny squirrel brains. By automating your savings and investing, you’ll be progressing toward the finish line no matter what. You’ll eliminate human error and emotion from your financial strategy.
We humans are lazy and cannot be inconvenienced
Humans are terrible. We are akin to sloths and if a task seems difficult or overwhelming, we simply avoid it for as long as possible. This is a huge reason why people fail to adequately save for retirement and various other financial goals. The idea of choosing the proper investments, setting up accounts, and monitoring them consistently is frankly too much for most people to handle. We shut down and place them on the back burner when we don’t quite grasp tasks that seem complex. This is not a great way to handle your financial future.
A little effort upfront to set up your retirement and investment accounts, automate your contributions to them, and pick a few good low-cost funds is worth it. It’s slightly inconvenient to set these things up, but when you’re done you’ll be glad you did and the prospect of not putting enough away for the future won’t continue to nag at you. With automatic saving and investing, you’re free to be lazy in every other part of your life! I’m literally eating Cheez-Its and wearing leggings as I write this. Leggings are pants, for the record. Don’t @ me.
Avoid temptations, mistakes, and forgetfulness
In addition to being inherently lazy, we are also forgetful, make terrible decisions and lots of mistakes. Don’t be offended. We both know it’s true. When you automate your finances you’ll remove a lot of your own power to neglect or burn down your financial foundation. It’s all about getting out of your own way.
More time for activities
Automation is all about letting technology do the heavy financial lifting while freeing up more of your time. When you don’t have to manually create a budget, pay your bills, or figure out how to invest, you’ll be free to do more exciting things like peruse every movie title on Netflix or tweet a lengthy thread on the problematic nature of Bachelor in Paradise.
You only need to check on it occasionally
Just because I’m telling you to take a “set it and forget it” approach to your finances doesn’t mean I think you should never log in to your bank account again. I suggest taking a look at your financial situation once per month to monitor things like goal progress and to verify the purchases on your credit card are all legit. That’s easy enough.
Obviously I didn’t cover how to actually automate your finances. I’m happy to explain how to do that in future articles if you all are interested. Until then, if you aren’t sure where to begin, the easiest place to start is with your monthly bills by signing up for auto-pay if it’s offered. To really understand how to automate and maximize your savings and investing I will refer to a few great resources:
Read this book:
I Will Teach You to Be Rich by Ramit Sethi