Your creditors would love it if you set up automatic payments each month on all of your accounts. This ensures the creditors that they will consistently get their money each month but does it give you the same peace of mind?
If you do not have a steady income where you get paid relatively the same amount each week or biweekly, you may find it difficult to set up payments at the same time each month. You may not be able to meet payment deadlines at the same time each month. A resolution to this particular situation is to speak directly with your creditor and see what kind of flexibility they can offer to you. You might be able to move some due dates to help you out. Work with your payment schedules and don’t give up totally the idea of automating all of your budgeting & forecasting processes.
If your income does make it easy to automate your budgeting and forecasting processes, whether with the support of a TM1 consultant or on your own, here are a few tips you can use to implement the new system:
Setting Up Auto Payments:
Most consumer bank accounts allow you to set up and make online payments directly from your checking account via their website. Other creditors will allow you to set up automatic payments from their website, using your credit card or bank information. It depends on your own comfort about which system works better for your financial management concerns. However, you might find that using the automatic budgeting & forecasting system through your bank gives you more control over your money and due dates than the creditor websites will allow.
Set Up Auto Deposits:
If you have the option through your employer to have your check direct deposited each pay week, you should take advantage of the service. Most companies will allow you to divide up your paycheck into different accounts, allowing you to save more money and leave you less likely to spend the cash had you had it in your hand. In this case, the theory of out-of-sight-out-of-mind can help your finances.
Set Up Auto Investments:
Just like you would use a direct deposit into your savings and checking accounts, you can also direct money to go directly from your paycheck into your 401k. The funds invested are automatically deducted on a pre-tax basis. You can also direct deposit money into a CD account or a Money Market account. This helps you save without thought or much effort.
Automating your budgeting & forecasting processes can really make a difference when your finances and trying to save cash. Since there is no additional effort involved on your part, you don’t have worry about physically making the deposits or be tempted to spend your money elsewhere rather than saving it for a greater purpose.