I’m Grateful for Automation in Our Finances
I know I’ve been repeating this ad nauseam in the past few weeks, but Kyle and I have been working a lot in the past couple months. I’ve been running into problem after problem with my experiments and am under a deadline to produce. Kyle has been writing his dissertation in typical Kyle-style – to the exclusion of everything else. We barely have time to keep up with our laundry and dishes and I’m falling behind on my blogging activities. For the first time ever last week I let blog posts go unread in my RSS reader for more than a day after they were published, and I really contemplated breaking my posting schedule and not putting up a post for today. (BTW, anyone who is looking to guest post, please email us! (Real guest posts from bloggers or readers, not spam.))
This post is the result of considering that one area that I’m not stressed out about staying on top of is our finances. I usually love looking at our finances and moving money around and playing with predictions, but that is definitely a free-time activity and not a necessity. We really have very few necessities in terms of maintenance of our finances because of all the automation we’ve employed.
Paychecks
Our pay is about half-automated and thankfully neither of us is paid in cash! Kyle has his paycheck direct-deposited. I am going on my third month of being on the non-comp payroll system and they still haven’t set up my direct deposit yet, so I have to deposit my paycheck through my smartphone right after I receive it (I love Ally). You better believe I retrieve my paycheck and deposit it the day it’s issued without fail! But still, I wish payroll would process my direct deposit request already. For Kyle’s little part-time job at church, he has to submit hours and then they direct deposit his pay, so that is one are that we still have to remind ourselves to do (but that happened before this busy time).
Tracking
Mint is the big lifesaver for our too-busy new lifestyle. I used to track my spending using Excel, but when Kyle and I got married he convinced me to switch to Mint, and this period is proving him so right on that call. I can check up on how our spending matches up to our budget in a second and I don’t have to log onto a bunch of different accounts to pull the data and try to reconcile it within my own system. The only time we have to recall anything about our spending is when we use cash, which is very rare.
Bill-Paying, Saving, Giving
We have all possible bills set up on auto-pay so we don’t have to worry about hardly anything slipping through the cracks. We even set up our bank to mail a check for our rent so we don’t have to deal with that (have I mentioned recently how much I love Ally?). Even our credit cards are set up for auto-payment right before their due date, though I prefer to pay them off a couple times per month well before they are due. And coincidentally, since we’re working on meeting a minimum spend for a new credit card, we’re just putting all purchases on that credit card and we don’t have to stop to consider which card we’re supposed to be using for maximum rewards. There is only one bill that isn’t automated, and one of us has the responsibility of paying it so we aren’t always thinking the other is going to do it. Oh, and our Roth IRA contributions and tithe are also auto-drafted 4 times per month so nothing to do there.
Targeted Savings
This aspect of our budget is half-automated. We have the monthly saving to our targeted savings accounts on autodraft, but I still have to manually transfer the money back out when we have a qualified purchase to reimburse our checking account. I’m usually right on top of this and do the transfers almost immediately, but I have let this aspect go a little bit. I’ll probably do a one-time reconciliation nearer to the end of the month and do all the transfers then, based on the transactions recorded in our Mint account. There isn’t anything bad that will happen by letting this go for a while, though of course I prefer to do it immediately. Then again, we’ve been too busy to spend much money so there aren’t many transactions to do.
As our lives get more complicated/busy/stressed with real jobs and kids and more savings goals and such, I’m sure we’ll become ever more grateful for the automation in our finances. But I am looking forward to having more leisure time to gaze at our growing net worth.
How much of your finances are automated? Do you trust autodrafting for your bills? What slips through the cracks first when your life gets busy?
photo from Free Digital Photos
Filed under: spending, targeted savings · Tags: bill paying, busy, spending, tracking
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You gotta love the power of automation! Its like running a water-tight ship with the clear knowledge that very little can sink it (You could always hit an iceberg like the titanic, but thats rare.)
Unlike you unfortunately am yet to enjoy the benefits of automation, I recieve bulk of my income directly in cash sometimes and thats pretty tempting, its easy to misappropriate it without a plan but am doing my best to bring some form of automation to it all.
Simon @ Modest Money recently posted..Barclaycard Arrival World MasterCard Review
I like your analogy! My sister used to be paid mostly in cash (waitressing) and she experienced an enormous increase in accountability and control over her finances when she started depositing all her tips and using her debit card exclusively for purchases.
I remember reading Ramit Sethi’s article on automation several years ago and having my mind blown. I think it’s possibly the single most important thing you can do to get your finances in order. With our targeted savings, we keep a good sized buffer in our checking account so that we don’t have to worry about pulling the money out of savings with any immediacy. That takes away that stress, though the process still ends up being manual.
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Our credit cards serve as that buffer – if I can make time to pay the credit cards off, I also have the time to do the transfers. 🙂
I only autodraft bills when the bill can go to the credit card. We’ve found too many company-made mistakes on bills to not want to have some reminder to double-check each month. Savings are automated. Giving is not.
nicoleandmaggie recently posted..Partial-retirement/self-employment experiment over
I think we only have one bill that comes directly out of checking at the moment – I definitely prefer to use credit cards as an intermediary.
The bulk of our giving is automated but we have some discretionary as well, so that is fun.
This month has been crazy busy for me too! I definitely haven’t kept up with my posting schedule, but I think there’s a silver lining to it. Though your blog is an awesome project, it’s not the most important thing in your life. If other issues are more pressing or more fun, it’s always ok to let it go for a while.
PS, I had three seperate conversations this weekend about how I spend more when I use cash and I referenced your post! No one else agrees with me.
Cash Rebel recently posted..Do extroverts or introverts make more money?
I really want to make it to 2 years with my posting record before re-evaluating the frequency. Getting through my reader is definitely a lower priority than getting my posts out and I want to stay consistent.
Thanks for referring to my post! Too bad those non-PF bloggers don’t get it!
Husband has few of the utilities on ‘auto-pilot’. I have just closed down some bank accounts (the fees were outrageous), so I’ll pay the bills ‘the old style’ (by going to their offices). I work from home and need to take a walk from time to time, I can make the payment then.
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Wow, I’m surprised you pay your bills in person, even if you enjoy the walks! That’s a very different attitude from ours/most.
I am somewhat scared of automation of certain bills. I have heard so many stories (and have experienced it once myself) when companies can auto-pull the wrong amount, the right amount too many times, and it leaves the customers account depleted, fighting to get a cheque cut rather than having a huge credit on the account for months. I do have direct withdrawal for my insurance, and condo fees, but everything else I consciously pay.
When I get stressed and busy, the first thing to fall to the wayside is generally my cooking and cleaning, which means my budget increases. I started to counteract that when I knew a busy time was coming up (such as comps) I would batch cook and freeze many single servings. I found that was quite impressive for me considering this was before I was financially aware.
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If you don’t mind paying your bills manually I don’t see anything wrong with it. I guess we’re just more afraid of missing a payment due to disorganization than being charged the wrong amount!
I’ve definitely been batch-cooking even more with being so busy. We’re eating the curry I finally got the hang of basically every day!
I should probably automate things a little more than I do, but I actually enjoy staying on top of it. There’s this little fear I always have that something will get screwed up and the payment won’t go through like it’s supposed to and I’ll end up with a late fee or something. But automation really is the way to go. I just need to get with the times 🙂
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If it ain’t broke, don’t fix it!
I pay my cell phone bill automatically, but I pay my credit card bills manually online each month (just because I want to look at them and make sure there are no weird charges etc.) If they were automated I might not pay as much attention and I might fees or charges that were incorrect.
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I still look at all of our charges (thanks, Mint!) – there aren’t so many transactions that something weird wouldn’t stand out.
We automate a fair amount of stuff, and what we don’t we have set to email reminders that it needs to be paid. It’s much easier than having to maintain a calendar and worry about every little thing.
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Email reminders are a great idea – I should do that for our one non-automated bill.
I don’t know that I could live without automated finances! All of my savings and bill paying is completely automated. In fact, the one bill that I can’t set on auto-pay is the one I have a hard time remembering to pay!
The First Million is the Hardest recently posted..Buying An Engagement Ring Online – My Blue Nile Experience
Of course it is!
We’re finally getting to a point in our marriage where our finances are getting automated now that we’re totally joint. I do still need to give myself time each week to go over our finances though.
I tried mint but with some of my bank, credit, and loan accounts, Mint would have struggles with getting things updated and I’d have to go through a huge rigamaroll to allow them access to my accounts even after granting them access previously before. I eventually got tired of it and haven’t used it in nearly a year. USAA actually breaks down my spending and allows me to add outside bank accounts so it’s kind of become my Mint. I get breakdowns of spending through Amex too. Perhaps Mint has gotten better access so I might try again now that I have totally merged with my husband.
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It is a pain to change accounts and update all your direct deposits and auto-withdrawals as you combine finances! It took us nearly a year to get it all sorted out after we got married. I’ve heard some others have similar complaints about Mint that you did, but I’ve never encountered them myself so it must be fairly bank-specific. That’s really nice that USAA serves the same function – it’s smart of them to offer that.
I’ve actually automated a lot more of my finances this year since increasing my credit limits to useable amounts. All of my bills go onto a credit card, all of which are autopaid out of my checking account. The property taxes can’t be autopaid, but once the bill comes, I set up the bill payments for the correct points in the year, so that I don’t have to worry about it anymore, unless all the money in my checking account disappears! I still check the bills, but this makes me feel like it’s less urgent to check them. My HOA dues are set up on auto-pay, but I set that up through my online banking, so it’s auto-push, not auto-pull.
I use a manual tracking system like you used to, but I’m very good at keeping receipts. Sometimes when I get busy, I enter receipts less frequently, but that’s okay, so long as I do it eventually. My mortgage payment isn’t auto-deducted, but I pay it from a second checking account and I just use the balance of that account to pay it. That way, I don’t have to check my spreadsheets in order to pay it!
The first thing that slips through the cracks is probably my blog, then TV shows, and anything that is non-short-term planning. This is why I like having systems in place to cover most things.
Very good point about the low credit limits making autowithdrawals tricky. Kyle had a pretty low limit on his first credit card for quite a while and he had to be very conscious of it. (Isn’t it counterintuitive that the only reason I started out with higher credit limits than him was that I had previously taken out debt? And I hadn’t even made any payments on it!)
I’ve been good about keeping receipts at times (not now!) but never good with actually using those records for anything.
I would be careful about auto-paying credit cards. We’ve had our credit cards skimmed a couple times and fraudulent charges were then added to them very quickly. It was easy to have them canceled and then not be liable for the items that were fraudulently charged. I just had to fill out an affidavit. I am sure you’d get your money back, but it is a lot easier to contest charges before you’ve paid them than after.
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We’ve had our credit card number stolen a couple times and always caught the charges quickly. Even with being busy, I’m still looking at Mint frequently so that sort of thing wouldn’t get by me! If I had to log in to a bunch of account separately it might take a few days, though, when I’m busy.
I am grateful for auto pay on some of my utilities. Its been so nice not having to worry about that. Our cell phone bill is tied to our credit card so they just take out the payment once a month.
Debt and the Girl recently posted..Can Frugal Be Taken Too Far?
I’m glad you’re taking advantage of the systems the way we are!
I used to have the time to meticulously monitor my spending day in and day out. Nowadays, I’m glad I’ve automated what I can – it saves so much time!
Lisa E. @ Lisa Vs. The Loans recently posted..Look With Your Eyes, Not With Your Mouth
Totally agree!
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