Despite how simple the process can be, most of us are terrible at saving and paying bills. Here’s a strategy to effectively automate most of your finances to keep you saving and out of late fee trouble.
Ramit Sethi of I Will Teach You To Be Rich.com has put together a system for managing your personal finances that only takes about an hour of your time each week. The video above fully explains the process in detail, but here’s the gist. First, you want to set up your bills and other payments so they’re all happening on the day you get your first pay of the month. Once you have that in place, you want to set up automatic savings plans with sub-savings accounts that let you organise your savings into specific categories (holiday, wedding, etc). You’ll also want to send a percentage of your pay to your superannuation if you top it up and have all of this happen immediately so that the money you see when you get paid is the money left when everything has already been saved. From there, you automatically pay as many bills as you can with your credit card (and then pay the credit card bill on pay day). This will leave a little money leftover in your savings account that you can use to budget for guilt-free spending and cash withdrawals.