This is the third part of our five part series following MindShift.money member Wendy Priester as she goes through Financially Fit Bootcamp. If you’re just joining us, you can start your journey with her here.
When I first read in Module Three of Financially Fit Bootcamp about how to stop worrying and start saving using Automation to move funds between the accounts in my Perfect Account Structure, I was pretty excited.
I love technology and all the ways it’s made my life easier. Using online bill pay and automatic transfers to keep my financial life organized is pretty awesome.
See, I know that if I left myself in charge of making all the necessary transfers, it wouldn’t get done. I’d forget, put things off, or come up with excuses as to why I couldn’t save any money this month.
It was a MindShift for me that by removing myself from the active management of my finances, I would actually be able to make more progress than before. By allowing all of my transfers and bill payments to happen automatically, I guaranteed they would actually take place.
I used the power of Automation to not only reduce Money Stress, but also to pay off debt and build my Security Buffer.
Making Technology Work for You
My main source of income arrives once a month, and it can be tricky to make sure there’s not too much month left at the end of the money. I’m self-employed, so the remainder of my monthly income arrives sporadically over the other weeks of the month. Trying to keep all the various pay dates organized gave me a headache. It was time to let Automation remove some of my stress.
I decided to pay all of my fixed expenses with my main paycheck at the beginning of the month. I had free bill pay from my bank, so I set up these payments to happen 72 hours after my paycheck arrives in my account. Using my Money Planner as a checklist, I went line-by-line to set up these payments and checked them off as I went. This helped me relax knowing that I had taken are of all the bills that were due in one go.
Then, I set up my automatic transfers to my specific Bills and Goals accounts using the same method so that nothing was missed. Most importantly, I set up my transfers to my Freedom Fund to make sure my future self is taken care of.
For my Everyday Account, I decided to make my weekly payment on Fridays. Who doesn’t love a Friday? There’s such a relief knowing that I am no more than six days away from my next payday. And the transfer happens automatically.
Keeping An Eye On Things
Now, I still check in periodically to make sure that things are still humming along as efficiently as possible. I have a standing appointment with myself once a month, three days before my main paycheck is due to arrive in my account.
The reason for this is that my bank allows changes to any automatic transfers or payments up to 48 hours before the transaction takes place. I like to give myself a little extra time to make any needed changes so I don’t stress about it. The whole process takes less than 20 minutes, and then I’m back to doing more important things, like chasing my dogs around the yard.
I have an automatic alert set up to notify me of any questionable charges or if my balance drops below a certain amount. I’m cutting the cord of information overload by allowing no news to mean good news. That alone has done wonders in the reduction of my stress levels.
My financial life essentially runs itself without any direct involvement from me. How many things in your life take care of themselves without you having to think about it?
I love that I’m saving more consistently than I ever was before. I get such joy seeing that amount in my Freedom Fund growing steadily larger each month.
Debt: Channel Your Inner Terminator
Oh student loans, you are the worst. While I’m thankful for the education, I’m really annoyed at the amount of student loan debt I still have. Using automated payments for my student loan actually resulted in fewer late payments, which saves me money on fees. In addition, my lender reduced my interest rate for signing up for automatic payments.
While I was grateful saving money on fees and interest, I wanted to see how quickly I could terminate my debt and stop sending my money to the bank. In going through the debt termination worksheet, I figured out that by adding 2/3 of my Pay Yourself First amount to my monthly payment, I would reduce the number of years to pay back my loans from 22 to 13. A difference of 9 years!
My goal is to try and accelerate this debt reduction and pay them off even sooner, something we’ll talk more about in an upcoming module. But for right now, I’m celebrating that nine year difference!
Have you taken the time to see if using your Pay Yourself First amount will speed up the termination of your debt? If not, I highly recommend doing so now.
Setting up my Security Buffer was one area I embraced fully and couldn’t wait to start on.
I felt a little discouraged that building up my three months’ worth of expenses would take longer than expected. I was ready to start investing. However, I knew that was the most important thing to focus on right now. I needed to make sure that I was building a solid financial wall of protection around myself.
You see, I had a health crisis a few years back that resulted in the loss of my job, not to mention my entire life being turned upside down. I know how important a Security Buffer is during life’s toughest moments.
I’ll talk more about this in the next article in this series. But let me assure you, nothing is more important than getting your Security Buffer in place as quickly as possible.
Celebrate Your Progress
Taking time to harness the power of Automation to reduce Money Stress in my life has been worth it. I’m so excited to see money flowing smoothly between my accounts, growing my Freedom Fund, terminating my debt and building my Security Buffer. All without any effort from me!
If you’re using Automation to help your money work more efficiently on your behalf, I congratulate you. You’re now far ahead of the 96% who aren’t paying any attention to where their money is going.
I’d love to hear the plans you’ve made to terminate debt and build your Security Buffer. Head over to the Financial Foundations Community Facebook page to share your success. I can’t wait to see you there!
image credit: Bigstock/Rawpixel.com
Wendy Priester is a former Tax Auditor turned freelance writer and certified Financially Fit Bootcamp Coach. When not working with clients to help them live their best financial life, Wendy can be found exploring the Rocky Mountains of Colorado with her two hyperactive dachshunds.