You’ve probably forgotten to pay a bill or two on time numerous occasions in your life. Avoiding this mundane mistake is easier than you think.
Let’s face facts. You’re a human being who is prone to forgetfulness and making mistakes. Financial speaking, you can avoid the latter and former by simply automating everything.
The utmost important thing to automate is your finances. If you leave it up to the organ upstairs, you could forget and come up with several excuses as to why you shouldn’t put money away every paycheck. To prepare for financial freedom, pay for that luxurious vacation or purchase that new car you need money in the bank. Yes, you could get a loan for those ‘wants’ on your list but that is not how to venture down the path of prosperity.
To embark down this path you should be paying yourself at least 10% of what you clear after taxes. If you want to be more wealthy, increase this percentage to 15% or even 20%. Accomplishing this can be done by managing post dated transactions or transfers from your online banking account or by simply calling the bank and have them set it up for you. You should put this money in a separate savings account or, if you want to conquer wealth, an investing account. The key here for investing and savings accounts is to not touch it so your friend, compound interest, can work in your favor. Of course, if you’re saving up for that car, withdrawal can occur once sufficient funds are met.
Meeting bill deadlines are not only good for your credit but healthy for you sanity. It takes no more than 5 minutes to sign up for automatic withdrawal for you power, energy, cable, insurance, tax and phone bills. In today’s society this can be done online or by filling out the required forms and mailing them into your service providers with a void cheque. This enables you to enjoy that pina colada while on vacation that much more and you can avoid those pesky calls from whom you owe money to.
In investing, automating exit points on stocks you hold will make you a more profitable trader. When you purchase a stock, set an exit point to mitigate loses or capitalize on profits. Putting an order in with your broker will alleviate your inability to make decisions. If you buy XYZ Corporation at $50 per share and are looking for a 10% gain, place an order in to sell at $55. Who cares if the stock keeps running and you miss a bigger move. The bottom line is you booked gains and no one every went broke by taking a profit. Furthermore, you can always re-enter the investment at a later date.
If you’re adamant on setting up a date with financial freedom and stress free living, automation of your finances is vital to your success.