Automating your finances provides some great benefits to you including saved time and money. Whether you are saving for short-term goals, like a winter vacation, or saving for your retirement, saving money does not have to be difficult or time consuming. Financial planning can help you budget the money you make and set money aside for other purposes so you don’t live paycheck to paycheck. If you could use some money-saving tips to set you up for financial success, here are some reasons why automating your finances can help you.
Why Is It Important to Automate Your Finances?
The key to achieving long-term financial security is automating your savings and expenses. Impulsive spending habits often get in the way of accomplishing certain tasks such as paying bills on time, saving for future goals, or having an emergency fund in case of any financial catastrophes. Human error can be eradicated completely if you set up a system where your income and bills are managed for you automatically.
Areas Where You Should Automate Your Finances
There are a multitude of savings accounts available within your bank account for you to utilize. If committing to transferring money every pay week is too challenging, you can set up automatic transfers to simplify the process. The following savings accounts serve different purposes, and if you can set up automatic contributions to a few of them, you will see a huge increase in your financial stability and a reduction in your stress levels.
Health Savings Account
While it may be practice to wait until you have a huge medical bill before you start contributing to your health savings account (HSA), you can avoid the stress of that situation by setting up automatic transfers from your paycheck to your HSA. Having a medical emergency fund will give you a peace of mind, and if you never end up using it, it can operate as a secondary retirement account.
Rent or Mortgage
Most people nowadays cannot pay off their mortgage as soon as they hope. Monthly rent or mortgage payments are often high and can put a huge dent in your earnings. Instead of trying to remember to pay them, set up an automatic transfer as soon as you get paid. That way, you can have the comfort in knowing that your bills are being paid on time, and it will help you to see what you have left to budget.
Energy and Utilities
Just like the rent or mortgage payments, setting up an automatic payment system guarantees your power won’t get shut off if you forget to pay!
Some auto insurance plans bill you once or twice a year while others send monthly bills. Automating your payments regardless of their frequency means you never have to think twice about whether or not you paid.
Setting up automatic contributions to your retirement savings account should be done as soon as possible. Even if retirement seems far off, it could cost you thousands of dollars because you are missing out on the benefits of compound interest. Setting up automatic transfers to your savings accounts may be difficult at first, but one you get used to the withdrawals from your checking account, you can sit back and watch your savings grow.
How LUSO Federal Credit Union Can Help You Increase Your Savings
LUSO Federal Credit Union is a not-for-profit, member-owned financial team that strives to provide customers and members with the best financial services and products. The specialists at LUSO can help you manage your finances by providing you expert tips on savings, budgeting, and investments. If you want to manage your income, understand your financial situation, pay off debt, or increase your chances of getting a loan, we can help you. Our services and rates are available in Wilbraham and Ludlow, Massachusetts. Contact our Ludlow branch at 1-(844) 587-6328 to learn more about emergency savings, or call our Wilbraham branch at 1-(800) 808-5876.