Auto Money Moves

Budgeting is one of those things that tends to get harder over time. Many of us start strong, tracking spending and cutting expenses, but once the initial buzz of budgeting wears off, we fall back into bad habits. Suddenly, your financial life is in disarray. One easy way to stop that from happening is to make as many of your money moves automatic.

Start With Your Financial Institution

To make saving automatic, you don’t have to look much further than your current financial institution. Here are a few steps to get started:

• Look at your bank or credit union’s automatic transfer and bill-paying options and figure out how to get started.
• Next, consider which bills are typically fixed each month.
• Use the auto-pay function to pay them in full.

Use for Fixed and Variable Expenses. This move should be applied to your fixed bills — like Internet, car payments, etc. 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 will cover your minimums. Then, go back in and adjust when the actual bill arrives.

Automate Your Emergency Fund

Next, you’ll want to set up an auto transfer into your emergency fund.

• Figure out the amount you can afford to pull from your paycheck.
• Set up automatic deposits through your HR or your financial institution.
• Deposit the set amount into your savings account each pay period.

If and when the time comes to pull money from the fund in a financial emergency, you don’t have to worry about building it back up again — the auto transfer is already in place.

Pay Down Debt Automatically

Finally, if you have 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 make that decision beforehand.

Bottom Line

The more automated your financial life is, the more likely you are to stay on the right path.