Now that the holidays and resolution season are behind us, it is a great time to take a few minutes to automate and cleanup your personal finances. Here are four quick ideas to save you time and money in 2014.
Sign Up for Direct Deposit
Whether you regularly receive a paycheck, social security check, pension check, or anything else recurring, sign up for direct deposit whenever possible.
With direct deposit, you never have to worry about losing a check. You never have to worry about going to the bank or taking the time for a mobile deposit. The money just appears in your account on a regular schedule.
What’s cooler than money just showing up in your bank account? I can’t think of anything.
Set Up Automated Savings Transfers
While you’re automating your deposits, take it a step further and automate your savings. You can do this by either spilling your direct deposit between two accounts or by setting up automatic transfers to your savings account on payday.
Many banks, particularly online only banks, allow you to set a recurring transfer to your savings account from your checking account. Whether you want to save $20 per paycheck or $20 per month, you can set that up to happen automatically.
If you already have automatic savings transfers, this is a great time to challenge yourself to increase it. The more you can save, the better!
Automate Your Mortgage or Rent Payment
Almost all banks have online bill pay for free. There’s no reason to write a paper check and mail it into the bank with a coupon, or mail your rent payment, when you can pay it automatically online.
Some banks, landlords, and HOAs have an online system that allows you to setup your payment there. I personally prefer to have everything paid from my banks’ bill pay instead, because I have 100% control and visibility over when payments are made and sent.
Whatever you do, always make sure you have enough in your account to cover your payments when they go through to avoid fees.
Automate Minimum Credit Card Payments
I always pay my credit card bill in full each pay period, but there is an easy way to build a safety net in case I forget.
Every major credit card company allows you to schedule your credit card payments to be made automatically. You can choose a specific amount, the full bill amount, or the minimum payment amount.
If you schedule the minimum payment amount, it will only go through if you have not already made your minimum payment. If you forget to make your payment, the automatic payment will execute and you will avoid late charges and missed payment fees on your credit card. And, while you're at it, be sure to shop around for the best credit card so you can find the best option that meets your needs, whether you are looking for a 0% APR or the best rewards available.
It is a great way to cover yourself just in case you forget to make a payment.
Your Best Ideas
What are your favorite tips and tricks to do a little financial housekeeping? How do you keep your system fresh and on track? Please share your annual to-do list in the comments.
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This may be a good time to look at your high interest credit cards. There are a few cards that offer 0% interest on balance transfers. You could pay your high interest cards with these offers and get some interest relief. Also, mortgage interest rates are low. You may save some money by remortgaging and locking these low rates for a long time. These are some of the ideas I have just now.
Great idea. If you are carrying credit card debt right now, it is a great time to cut the interest rates down with a balance transfer and pay off that debt once and for all.
Everything is automated for me! I don’t even know what a bill looks like.
I had a few bills come in the mail after I moved to my new address in Portland. Weird to get paper bills in the mail after paying everything online for so long.