How to Automate Your Financial Life

Financial planning requires work and discipline, but that doesn’t mean you need to spend all your time tracking your finances. If you make smart use of automation, you can save time, money and the mental energy needed to make decisions.

Here are four aspects of your financial life that you can automate right now.

1. Saving

Saving money is a bit like visiting the dentist—we all know it’s good for us, but many of us tend to put it off.

In both cases the rewards (financial security and healthy teeth) become more apparent over long-term, but achieving them requires some short-term sacrifice (less impulsive spending and an hour in the dentist’s chair). When faced with this kind of trade-off, we’re often tempted to pick the easier option.

Automating your savings takes the temptation out of the equation.

Whether it’s through your bank or an app like Koho, it’s incredibly easy to set up automatic transfers so that a specific amount or percentage of your paycheque is transferred to your savings account at regular intervals.

Tip: Pick an amount or percentage of your paycheque (e.g. 15%) to auto-save and just get started; you can always adjust the amount later, depending on what works with your budget.

2. Paying Bills

Phone, Internet, Netflix, gym—most bills come once a month for the same amount, so why waste your time and brainpower making repetitive manual payments? Worst of all, if you handle your bills manually and make a late payment (or forget to pay altogether), you’ll often wind up stuck with hefty late fees.

Do yourself a huge favour by setting up your bills for auto-payments and then forget about them.

Tip: Use your credit card to set up automatic bill payments so you can benefit from the card’s points or cashback program—just be sure to pay off your credit card each month.

3. Investing

Growing your money through investments is typically a long-term undertaking, but that doesn’t mean it has to be time-consuming. With a bit of planning and effort upfront, you can set up automatic transfers to an investment account. This will gradually build your retirement nest egg with little active involvement on your end.

Wealthsimple and ShareOwner are two examples of robo-advisor firms that can help you with fuss-free, low-fee investing. With their assistance, you can simply create a portfolio suited to your preferences, set up monthly transfers from your chequing account and then get on with your life.

Retirement may still be decades away, but starting early and investing regularly will allow you to harness the power of two important investment concepts to grow your wealth: the time value of money and dollar-cost averaging.

Tip: Putting your money in a tax-free savings account (TFSA) or registered retirement savings plan (RRSP) will help you reduce the bite that taxes take out of your investments.

4. Budget Tracking

Setting up automatic savings and bill payments is good, but being able to track all your income, expenses, assets and liabilities in one place is even better. Automated budget tracking is a great way to gain a complete picture of your financial situation, incorporating all the individual components of your financial life listed above.

Forget the Excel spreadsheet budget that you’ll undoubtedly abandon within days. Today, setting up a budget using apps like Mint and YNAB is relatively quick and painless. Once the apps are synced with your various accounts and credit cards, simple interfaces allow you to track your spending, set savings goals, create payment reminders and generally get a better handle on your finances.

Ultimately, knowing where your money is going will help you make better financial decisions.

Tip: Using an automated budget can help you out come tax season by having important information about your income and expenditures at your fingertips.

With so many great tools available to automate your financial life, there’s no good reason to be spending your time and mental energy on tasks that can take care of themselves. By making a small effort now to get things set up, you’ll be freeing up time and saving money for more of the things you love.