Easier said than done ! This little phrase is a reality for many things in life, but especially for personal finances. Unforeseen circumstances, unexpected purchases and the urge to “splurge” from time to time can contribute to the failure of the best budget plans.
If you want organized finances and if you also want to make managing your budget easier, you need to put your finances in “autopilot” mode. This will not stop you from buying this extra candy bar at the store, but it will solve most of the problems that occur when you try to manage your budget month after month. In addition, this plan will reduce your stress level because you will not worry about paying the bills manually month after month.
How can you put your finances on the “autopilot”?
You can pay almost all your monthly bills by automatic payments. To do this, you will use the credit or debit card or give you your bank account details. But will that completely solve your budget problems? No, since you must ensure that you have sufficient money in your bank account at all times to cover automatic payments. However, you will not have to pay each bill individually, so the process will be much simpler. This will prevent late payments that could affect your credit score and interest rates.
Automatic transfer to the savings account.
The other positive aspect of the financial “autopilot” is to allow you to save money more consistently. Each month, you automatically transfer your chequing account (where you deposit your salary or other income) to a savings account. So you save without thinking. You will be able to open a savings account and earn interest.
You will know exactly how much you have to spend
As pointed out earlier, putting your budget on “autopilot” will not stop you from doing this “impulse buying” at the store. It will, however, allow you to know exactly how much you can spend after paying bills and savings. If you pay your bills and transfer the amount to save a few days after receiving your various income, what’s left in your account will be used for the month’s expenses. You will make sure that you can pay for that amount with food and other necessities. Once this is done, you’ll spend what’s left as you see fit.
How to deal with unexpected expenses?
Some different options are available to you in case of unforeseen events. First, once you start having more money in your savings account, you can open a second account that you will use as an emergency fund. The money transferred will thus serve the unforeseen.
Another option is to deposit in an emergency fund the money that remains after you have paid all the expenses of the month.
Finally, you can consider a personal loan online for the unexpected. The fast application process allows you to get approval within hours. The lender then deposits the money into your bank account within one business day or less. You will then add the loan payments to your “autopilot” budget until full refund.