To master personal finance, it’s important to keep administrative hassles as low as possible. This could include tasks like moving money from a check to savings or donating regularly to an IRA. Instead of adding another task to your to-do list, you can automate these transactions to passively reach your financial goals.
Finance automation takes some effort to set up the infrastructure, but once established, you’ll be well on your way to achieving your goals.
Here are three ways automation can help you reach your goals.
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1. Pay first and turn on notifications.
A great way to potentially build wealth through automation is to pay yourself first. This means that you automatically contribute to your employer’s retirement program before you receive your salary. Additionally, if you want to donate to the IRA, you can use our automated investment platform to automatically withdraw funds from your checking account. By doing this, you force yourself to save rather than spend. Your future self will thank you. Please note that everyone’s situation is different and it is best to consult your financial or tax advisors before trading or investing.
Additionally, it is important to turn on notifications for each investment platform you use. First, if your debit or credit card has a subscription or other charge applied to it, its cancellation should be noted rather than missing one of the items on your monthly statement. It means that
The second reason is the continued increase in identity theft and digital payment fraud. By turning on notifications every time a payment is made, you can prevent fraud by alerting your bank immediately.
2. Use an automated investment platform.
While investment platforms are similar in nature, they differ in how they help investors leverage their funds. While some platforms require each user to manually enter investment decisions, platforms like M1 can be customized and automated to meet each user’s financial goals.
For example, if you want to invest monthly in Roth IRAs and traditional brokerages, these platforms can help you leverage your funds in their respective accounts. In addition, platforms like M1 provide the tools to fully automate investments to directly fund the securities you want to buy.
For example, if you want to automatically invest $250 in a specific ETF within the Roth IRA each month, you can set that parameter right away. And even if you have a portfolio with multiple securities, you can still design how the funds are divided among the securities.
as best-selling author and personal finance and retirement expert Dave Ramsey (opens in new tab) “You can’t overcome bad spending habits,” he said. This means that no matter how much you earn, you have to learn how to live on less money than you earn. And because your monthly expenses are different, it can be difficult to keep paying for each purchase or payment while meeting your financial goals.
One solution is to use an automated budgeting app that divides your money into spending categories. These “buckets” include housing, groceries, car payments, and other necessary expenses in one section. The next bucket may be essential savings and investments to reach your financial goals. Any remaining funds can then be used for discretionary spending, such as going on vacation or upgrading to a new phone.
There are some platforms like YNAB that can scientifically figure out exactly where your monthly income goes. (opens in new tab) (budget required) or PocketGuard (opens in new tab). Both platforms automatically reflect updated account balances so you can continue to keep your financial life as simple as possible.
This article was written and presented by our contributing advisors, not the Kiplinger editorial staff. You can check the advisor’s record in the SEC (opens in new tab) or at FINRA (opens in new tab).