In the past, our grandparents managed their finances with the old note pads and ledger books, and they did it quite well too. Today, technology and innovation have revolutionised the way we handle money. It is more sophisticated, yet simpler than the previous generations.
Unfortunately, not many people are aware that there are certain automated applications to ease their day to day finances. For instance, there is always money saving apps that is readily available to keep track of your spending and manage your budget effectively.
To enjoy financial freedom, here are some simple ways to automate your personal finances.
- Merge your banking accounts
You probably have more than two different bank accounts to settle your various financial obligations- monthly income, current accounts, savings and so on. It is more efficient to get an app that consolidates these accounts so that you can capture your balance at a glance. This puts personal finance into perspective and makes planning easier.
- Set up accounts exclusively for bills
You can choose to have two current accounts and two savings accounts. One pair of current and savings account is what you use daily, while the other two are for bills and income respectively. The main current account can be used for regular expenses such as fuel purchase, groceries, and repairs, while the main savings account can be used to store your extra income. Your bills account is where you make budgeting plans.
- Pay your bills – automatically
Now that your expense accounts have been set up, make out what bills you want to budget for. Set up an automatic transfer from your daily current account to the bills savings account. Do this so that the transfer is effected immediately you get paid. This will keep you ahead of your budgeting and reduce chances of falling behind on your payments. A structured payment system or money saving app will give you peace of mind.
- Don’t forget to pay yourself
A percentage of your money is yours to keep. Following the 50-20-30 budget rule made popular by senator Elizabeth Warren, you can transfer 20% of your earnings into the income savings account. Some people can afford to do more. Because it is not meant for daily use, some experts advise you to make your savings account a little difficult to access.
An automated process makes your budget planning more efficient and gives you control over your financial freedom. There are various products for each service listed. If you are still using the traditional system or running your accounts like a wallet, now is the time to hop into the automated money train.
It’s simply a matter of setting up your transfers for the correct amount and time from your bills savings to the bills current account. Gone are the days when you need to think about run to and from the bank, organising banker’s drafts and keeping a book of your accounts. We live in a time when all our financial info fits neatly into the palm of our hands.