Automating payments presents a number of advantages. You can earn discounts, budget your cash flow better and forecast your financial requirements. When you get used to set amounts debiting from your account, you will eventually remove them from the equation. This takes away the temptation to tap into those funds, allowing you to create a workable budget that won’t leave you deeper in debt.
Remembering scattered payment dates throughout the month can become confusing. Your aim is to allocate money then forget about it – until such a time as you need to re-examine your budget. Depending on how often you get paid, you should set all your automated payments to come out on the same date, each month. To better manage your finances, there are various online apps and resources that can help you. Applications such as Mint, You Need a Budget and Mvelopes, are ideal. However, if you are not tech savvy, then keeping a calendar of your automated payments, when they reduce and completion dates, will suffice.
Another important point to remember is that automated payments do not only apply to regular household bills. You can set up regular payments for insurance policies, retirement funds, college plans and investments. Although many of these payments are not essential to everyday life, by budgeting automated payments, you are preparing for the future. Before you know it, that money won’t even exist in your mind. In fact, you will probably find yourself looking for other sources of income before even thinking about touching your monthly automated payment funds.