You Should Automate Your Financial Goals
As with any type of decision, actions speak louder than words when it comes to achieving your financial goals. Making progress in personal finance requires specific steps that can mean the difference between a vague “I want to save more!” and the more substantial “I’m going to make the most of my Roth IRA this year.” Fortunately, while there’s no way to automate your gym workouts, it’s much easier to set up and forget about your financial decisions. Here are some of the types of financial goals you can automate to set yourself up for financial success in 2023.
How to automate your financial goals
Many finance-related goals can be at least partially automated, meaning that if you are clear about what those goals are, they can be a guaranteed resolution win. Chances are, you’ve already set up automatic payments for bills like rent, utilities, insurance, and credit cards. But if you haven’t already, you should also automate deposits into your savings and investment accounts:
- 401(k) and other long-term savings
- Short term savings
- Long term investment
- emergency fund
Setting up automatic payment online is very simple and usually all you need to do is log into all your accounts and find the menu you need. But once you’ve done that, it’s time to get specific: decide how much to automate and when those payments should go through. We recommend spreading out automatic payments so that your bank account doesn’t get hit hard on the first of every month.
Here’s an example of how to break up your automatic payments from Ramit Seti, author of I’ll Teach You to Be Rich :
Second of the month: As soon as your salary is transferred to your checking account, a portion of your salary (about 10%) will immediately go to your 401(k) account.
Fifth of the month: Regular contributions are transferred from your check to your savings account and to your Roth IRA. (Note: To maximize your Roth IRA in 2023, you can contribute approximately $542 each month).
Seventh of each month: Your credit card and other miscellaneous bills are automatically paid.
After the scheduled automatic payment date, register to confirm that the transactions have occurred as planned. Keeping track of the dates and amounts of your payments will help you stay vigilant when you review your recent transactions for discrepancies. Because while most automatic payments make your life easier, remember that some of them can end up costing you dearly .
Save easier by spending less
The reverse side of ” save more! “will always be” spend less! “If you review your spending over the last 90 days, you will likely find that you can cut back on areas where you don’t even realize you are wasting money ( missed subscriptions come to mind). It also helps control your unconscious spending with tricks like physically writing down the things you want to buy before you buy them. When it comes to personal finance, often the simplest steps will help you gain control of your money.