Wouldn’t it be wonderful to not stress about how much of your salary goes here, there and way over there in your savings account each week?
Missed bills, late payments, cranky friends … wouldn’t it be great if your bank account could do the thinking for you?
Well, by automating your finances you are one step closer to stress-free finances. By setting up weekly direct debits and actually using your offset account you will not only feel less panicked, but your home loan will also benefit.
Instead of frantically scrambling to transfer money each week once your pay comes in, if you sit down once and automate what money goes where on a specific day of the week or month you literally won’t have to think about it again.
If you’re still a little lost on where to start, here are five tips and tricks for automating your finances
Set up direct debit.
Figure out how much of your salary is going towards bills, savings and spending. Seem a little obvious? Well, sorting it into categories like home loan payments, savings for a holiday, offset funds, weekly food shopping, investments, phone and internet bills will help you see where your money is going and how much should be going to those categories each week.
By direct debiting these funds into different accounts (check, savings, credit, offset) you will have no choice but to do it and you won’t have the hassle of wondering where your money keeps disappearing to!
Use your offset account.
If you haven’t already sorted out an offset account go and do it! Right now! It’s a great way to save interest on your home loan and if you send a portion of your salary each week (or month) over to your offset account, soon enough it will have accumulated enough for an additional repayment or just turn into a really useful nest egg.
Split up your savings.
This is great if you’re saving for something in particular. You can automate your direct debit into a savings account and a transaction account. This way you can use one account for saving up for a holiday and the other for an important bill you know is coming up in a few months (you know this because you’ve already sat down and worked out every single bill you are going to be receiving in the next few months – good job)
Learn about earning interest.
Understanding what types of accounts earn greater interest with your broker is one of the first steps you should take in automating your finances. This will help you figure out where to put your money. For example, if you’re planning on saving as much as possible in one year and don’t want to take out any of your saved cash, then looking into a transaction or savings account that earns higher interest is definitely worth considering.
We all know the feeling. An overdue bill looms in your mail box and you’re thinking “I am pretty sure I paid this…” But did you really pay it? Staying on top of bills can be stressful. By automating your bills or at least your monthly ones like phone bills, internet bills and health insurance means you won’t have to worry if you really had paid for it or not. Try and sort out a schedule that works for you and your finances. There isn’t much point having every single bill direct debited on the same day each month (unless that works for you) or having a routine of every time you get paid to deposit money into a designated bills account.
So, once you’re ready to sort out automating your finances the first thing you need to do is talk to your broker to find the best products for you. You can then go on to set up direct debit for all your regular bills and even plan extra savings. Automating your finances are a great way to successfully manage your finances and hopefully help you on the way to becoming a stress-free home owner!