Auto Money Moves

Use your bank’s or credit union’s auto transfers to help stick to a budget

Budgeting is one of those things that gets harder over time. It’s kind of like dieting: It’s fun and exciting to make the right choices and to see the numbers on the scale starts to move. But then life sets in. You start eating poorly and maybe skipping the gym. Likewise, once the initial buzz of budgeting wears off, you can forget to pay a bill or to pad the savings account. Suddenly your financial life is in disarray. One easy way to stop that from happening is to make as many of your money moves as possible automatic.

Take a look at your bank or credit union’s automatic transfer and bill paying options and figure out how to start using them. Next consider which bills are typically the same amount each month, and use your tool’s auto pay function to pay them in full each month. This move should be applied to your fixed bills — like Internet, car payments, etc. As US News reports, if you have lots of room in your budget, you can even set up auto payments for every bill, even ones that can fluctuate each month. Just set up an amount that you know without a doubt with cover your minimum. Then go back in and adjust when the actual bill arrives.

Next you’ll want to set up an auto transfer for your emergency funds. Simply figure out a small amount you can pull from your pay and have it deposited into your savings account each pay period. Then, when the time comes to pull money from the fund, you don’t have to worry about building it back up again — the auto transfer is already doing that.

Finally, if you have some debt, use your credit union or bank’s auto functions on that, too. Work out how much you can use to pay down your debt and automate the payment. It’s all too easy to bypass paying debt when things get tight, so take the decision out of your hands. The more automated your financial life is, the more likely you are to be on the right path.

Chris O'Shea