Step 2 Automation: 5 Ways to Simplify Your Financial Life

Our personal finances- budget, investments, retirement, insurances, credit, etc.- are one of the leading causes of stress among adults. School systems only recently started offering personal finance courses to high school students within the last 5 years, and it is not yet a leading standard of education throughout the nation. But it is something that every adult must navigate, and it deeply affects our quality of life day to day. This leads to large amounts of confusion, which results in higher taxes, significant loss of potential investment returns, lost cash flows not being put to good use, and even poor credit scores. In the midst of financial confusion, making small changes can have a big impact on your overall financial health. Here are 5 basic steps to simplifying your financial life:

2: Automation

Everyone has the best of intentions when it comes to their finances (or at least I would like to believe they do). We would love to give generously to our local churches and charities, take advantage of our employer’s matching contributions inside our 401k, pay off our student loans and credit debt, and save that extra $100 for a rainy day. Many of us even have the means to do it all. So, why is the general public in debt up to our ears, underinsured, underprepared for retirement, and swimming to get paycheck to paycheck?

Well there are a lot of reasons, but one is because money is not our number one priority day to day. We all know money is important. But money isn’t urgent. We get home from work, and are immediately moving into making dinner, helping kids with their homework, running to our weekly meet up (small group, friends, etc), trying to get some exercise, do the laundry, clean up the house, etc. And when the dust finally settles, most people aren’t excited to delve into their 401k plan. We want to relax for the last glimmering moments of our day. We are busy. We live in a world that goes from thing to thing. And if we aren’t careful, we will leave our financial health behind.

So, as opposed to taking more precious time to pay the credit card bill, give to charities, save the extra money- Automate it. Look, I am a financial professional and I know that if there is money in my checking account, I am not moving it manually to my savings. I am spending it. That is why my wife and I automate it. Our retirement savings come straight from our paycheck, so we don’t have to think about it. Our savings for investments and emergencies are all automatic each month. Our giving happens monthly automatically. Even debt is best done automatically. You can automate your credit card to pay off the full balance each month as opposed to the minimum so the balance doesn’t keep mounting (or select an amount that is above the minimum to really begin paying it down).

Don’t let your busyness compromise your financial health. Help your kids with their homework, exercise, be with your friends and family, and know that you are good to go because your bills are paid and your money is saved and growing. It is all done behind the scenes because you have automated it.