Spring is the perfect moment for you to clean up your finances, and make sure everything is in control to help you get the best return for your money.
1. Automate your bills
Something I have been doing for years that saves me a ton of time is simply having my bills on autopilot. Every first of the month, money kicks in from my tenants, and money comes out to pay property taxes, utility bills, etc. I rent with all bills included, so I pay for internet, the TV license, the electricity and so on. Automating your bills only has pros. First, it will insure you never pay a late fee anymore. Second, you can usually pick the day of the month you’d like the debit to come through, so you can put it right on pay day or a day after, to make sure your current account is fully funded. Finally, a lot of companies will give you a discount on your bill for setting up an automatic monthly payment. It is not much, but every little helps.
2. Automate your investments
You should also look into automating your investments. Investing doesn’t have to be complicated, and if you send a regular amount to your investing nest egg every month, you can dollar average your stock purchases, and like your bills, set it up and forget about it, so you don’t need to remember to invest every month.
Robo advisors are all the rage lately. They simply are automated investing platforms that make investing recommendations for you, based on algorithms. Comparing the best robo advisors depending on your needs is pretty straightforward, and you can find a Betterment or a Wealthfront review online as well, to help you make an educated decision. They charge a lower fee than managed funds and are great to get started with automated investing.
3. Automate your savings
The same way you automate the money you invest every month, you should automate the money you save. That way, on pay day, all that money disappears automatically from your account. You won’t miss it if it is not there, and you don’t have to make constant decisions about whether or not you want to spend that money. Minimizing pointless decisions is one of the secrets of highly successful people. That is why president Obama and Facebook’s Mark Zuckerberg wears a similar outfit every single day. If you keep the money on your account all month, chances are you won’t have as much as you’d hoped to put towards savings than if you had automated a wire transfer on pay day.
Cover your short term savings, for holidays, Christmas or a big purchase such as a computer, mid term savings for car replacements or maintenance on your house, and long term savings such as a downpayment or a college fund for the kids. Without forgetting your own retirement fund of course.