Do you ever find that you miss paying a bill and end up with late fees?
Or that you dread paying your bills because you’re not sure where your money has gone?
Well, putting your finances on autopilot can help.
Here are some tips to reduce the stress of your household finances:
1. Direct Pay Your Utilities Every Single Pay
A simple $20 payment each fortnight to your electricity company can mean that you go from bill shock every 60-90 days to bill happy.
Instead of getting a $1200 electricity bill that wipes out your account, you’ve been chipping away at it with small payments. When the bill arrives, you’ve already paid most of it.
This works for electricity, gas, water, internet – any bill that comes regularly. Set up a small direct debit from each pay and forget about it.
2. Get Work to Pay for Your Savings
We generally spend what we have, so if you use work’s ability to pay your payroll directly into multiple bank accounts, you won’t have the money to spend.
Many payroll systems can split your pay into different accounts. Tell them to put $100 (or whatever you can manage) straight into savings before the rest hits your everyday account.
If you never see the money, you won’t spend it.
3. Have a Bank Account That You Top Up Each Pay for Annual Bills
That way, when the car rego or the insurance bill comes, you already have the funds there saved for you. Add in the cost to replace two tyres each year, and you’ll have a buffer there if anything goes wrong.
How to Work Out How Much You Need
Go through your bank statements for the last year and add up everything that’s an annual expense, or could be. How much extra are you paying for being able to pay monthly instead of annually?
Divide this total into:
- 12 if you’re paid monthly
- 26 if you’re paid fortnightly
- 52 if you’re paid weekly
Then, use your internet banking (or payroll) to set aside that money each pay into a different bank account that’s just for that purpose.
Automating your finances doesn’t mean you’re not in control. It means you’re setting things up once so you don’t have to stress about them every week.
Small payments add up. Money you don’t see doesn’t get spent. Bills you’ve already saved for don’t create panic.
Put it on autopilot and reduce the stress.
Disclaimer: This information is general in nature and doesn’t take your personal circumstances into account. Always seek professional advice for your specific situation.
