When I write articles about some of the key steps to transforming your financial life, my intention is to help you be more mindful about your money and improve your financial situation. It’s just like going to the gym. If you go to the gym a few days this week and not at all next week you probably won’t notice any change. But if you exercise regularly for a month, it can help create new habits and improve your overall health.
I want to help you improve your financial health, but it is up to you to do the work. Now you may be familiar with some of the topics I’m going to talk about, but stick with me! I’m sure there will be at least a few new nuggets of information for you…
So far we have covered 7 steps that I feel are important in helping you transform your financial life.
Step 1: Money Mindset
Step 2: Create a spending plan you love
Step 3: Track your spending
Step 4: Stop the leaks
Step 5: Create a Savings Plan to support your dreams and goals.
Step 6: Increase your credit score
Step 7: Tackle your Debt
Step 8, Automate Everything, can be a bit tedious at first but once it is done it will help make your life a lot easier.
Set up direct deposit and automatic payments for as many bills as possible
Some banks will waive the monthly service fee if you set up a recurring direct deposit (e.g., for your paychecks). Direct deposit helps to ensure your check is not compromised and that it is deposited in a timely manner to cover expenses that are automatically paid out.
Be sure to PAY YOURSELF FIRST utilizing your retirement plan and savings accounts. In other words, set aside a portion of your paycheck for retirement or other savings goal before you start spending it. If you have access to an employer 401(k), 403(b), or something similar, start contributing now. If you are already utilizing employer retirement plans, consider increasing contributions. You can also set up automatic transfers (e.g., on the date you get paid) from your checking account to your emergency savings account or other savings account (e.g., vacation, big purchases, etc.).
Setting up your bills to be paid automatically from your bank account or credit card can help you avoid late payments that may affect your credit. If you are not in the habit of paying off your credit card monthly yet, you may want to only pay bills from your checking account to avoid incurring debt.
Setting up automatic payments may be time consuming at first but in the long run will save you a lot of time and potential frustration on late payments. Once you get a rhythm going it will be much easier to balance out your accounts. That being said, here are some good practices to help protect your account and minimize errors:
Tackling debt can be a daunting challenge, but don’t let yourself worry or become overwhelmed. With some discipline and patience, you can do this! Once you have your debt under control, it will help you feel more confident about your financial well-being. And when you spend less time worrying about debt, you can have more time to do the things you want to do.
Here’s to you…living richly!
References and Further Reading
Clark.com. (2019). Automatic Bill Pay: How It Works and How to Do It Safely
Chopra, Deepak. (2015). How Meditation Can Help Anxiety
United Capital Financial Advisers, LLC d/b/a Goldman Sachs Personal Financial Management (“GS PFM”) is a registered investment adviser and an affiliate of Goldman Sachs & Co. LLC and subsidiary of The Goldman Sachs Group, Inc., a worldwide, full-service investment banking, broker-dealer, asset management, and financial services organization.
The information contained herein is intended for informational purposes only, is not a recommendation to buy or sell any securities, and should not be considered investment advice. GS PFM does not provide legal, tax, or accounting advice. Clients should obtain their own independent legal, tax, or accounting advice based on their particular circumstances. Please contact your financial adviser with questions about your specific needs and circumstances.
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