Ditch the Budget and Automate Your Money

Ditch the Budget and Automate Your Money By, Nicole Crimaldi Its a Friday afternoon and you are walking home from work. Youve had a super stressful week at work. Not only are your superiors on you about a plethora of issues at work, your best friend cancelled on your girls night and you are in a fight with your boyfriend. Enter fabulous local shopping center. You walk past your favorite store and see a gorgeous outfit, purse, new makeup, shoes- whatever in the window. I DESERVE IT! You tell yourself. What a week! Out comes the plastic. Followed by another credit card bill you cant pay off. You tell yourself, its fine- I just wont eat this week. Followed by you thinking you might as well keep going down Michigan Avenue and add to the pile. You just got paid, It will all work out somehow, right?! Stop right there! If you are an impulse or emotional shopper who hates the word budget then you need to get automated. This is for your own peace of mind and financial security. I hate the word budget too, but I love the word GOALS. Heres what I suggest Set up 3 free checking accounts which your paycheck direct deposits to each pay period: 1. Savings Rent: For your rent/mortgage payment + your savings. 2. Operating Account: for utilities, your cell phone bill, car insurance, groceries, gas and any other monthly bills you get. 3. Fun Money: for shopping, going out, travel hobbies. Why this works The theory behind automating your money is that money is being set aside to pay your bills and savings FIRST.   Automating your money takes the I had a bad day so Im going to spend money I dont have out of managing your finances. Your bills will always be payed on time since they are automated and there will always be funds. Over time, you will see your credit score increase because all of your bills are being paid on time (no lost checks in the mail, etc.). Your savings account will increase because you are putting fixed payments (like taxes) into an account each pay period. Your will debt decrease because you are making fixed automatic payments to pay down (or even pay off) your credit card each month. You can become more disciplined with what fun money you have since you pay your bills first and separate them from your play money. No more worrying or having to wait for checks to clear to know your balance. Dont start making excuses about how this is too hard to set up. Let me help you. You will need to know your routing #. This is a 9 digit # on the bottom of your checks. If you dont have checks, call your bank and ask for the routing #. Get your bills out and figure out what you pay total in utilities each month. Round up a little bit so there is padding. If you get paid bi-weekly, divide your total by 2. This is how much you will have direct deposited to your bills account each pay check. Do the same for rent. If your rent is $1000/month, have $500 per paycheck direct deposited into your rent account. Sit down with yourself and consider your long term goals. How much money do you want to have saved by the end of this year? Are you saving for a new car? Home? Wedding? Figure out how much you need and how long you have to get it. For simplicitys sake, if you want to have $12,000 saved in 12 months, then have $500 ($1000/2) direct deposited into that rent/savings account each month. Try it out and let me know what you think. No more leaving your financial future to the wind. How do you currently automate your finances to keep yourself on track?