Financial Impact with Holly Morphew, AFC® Financial Coach

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Automation For Financial Success

Automation For Financial Success

Automation is today’s new buzz word. Why? Because time is money, and the more time we spend doing things that bring us joy, inspiration, a sense of belonging, and giving back, the happier humans we are. And, the more time we have to do things that make money, the more money we can make. Win-win! So, how does automation fit into this? It does two things: automation allows us to do things faster, and allows us to do things more precisely, which both save time.

I love the economy we live in today. We can automate just about anything with the click of a button, from grocery shopping (Instacart anyone?), meal prep and/or delivery (UBER Eats), ride service (Uber, Lyft), dog walking, child care, furniture delivery and set up (IKEA), shoe design (Nike, Sketchers), interior design (Havenly). You get the point.

But what about bill paying and managing your money? It’s one of those things that must be done, and for some it’s a real hassle… or snooze. I find many people don’t want to open mail simply for fear of what’s inside, or because it means taking action– on a deadline! This can be intimidating, not to mention overwhelming. But I have good news! You can take the hassle out of it, and at the same time, create a sense of power and confidence when it comes to managing your money.

Simply follow these steps.

1.  Open your mail once a week. That’s it! Set some time aside to go through your week’s mail. Generally, this shouldn’t take more than one hour. Most people don’t get statements electronically anymore, and that’s fine as long as you actually read your electronic statements. If you don’t read them, you could be spending thousands of dollars a year on unnecessary, unwanted, or erroneous fees or charges.

2.  When opening your mail, use a letter opener (you can buy one for less than $1 at Target or an office supplies store). It’s more fun opening envelopes at lighting speed, and I find it satisfying too. C’mon, it’s the little things!

Make a throw away pile (envelopes, sales collateral, etc.). I also tend to never open anything that has a “presorted standard” stamp on it. That’s a sure sign it’s not important, or someone is trying to sell me something. I’ll rip the envelope in half and put it in the throw away pile.

I open everything with a first class stamp on it. That means it’s important and I’ll probably need to take some sort of action with it.

Make a “take action” pile. These are things you need to follow up on, or bills that need to be paid. Or coupons you want to keep, etc.

3.  Use your “take action” pile to pay your bills through your bank’s online bill pay system. Consider this, why take time to visit 20 websites to pay 20 bills when you can pay them all from one website (your bank’s). There are tons of advantages to this, and I still haven’t come up with any disadvantages after using this system for 10+ years. Additional advantages to using online bill pay are

1.  You have an electronic paper trail of all the bills you’ve paid. This is great for providing proof of payment, but also nice come tax time when you need to see what you paid to who over a 12 month period.

2.  You are making your bank responsible for delivering payment on the date you specify.

3.  Your routing and checking account numbers are not on the checks that go to your payee. Only your account number with your vendor appears on the check, so they can identify what the payment is for and credit your account. Your account information remains private, which is crucial in today’s economy with heightened cyber-security threats.

Gone are the days of writing checks, licking envelopes, addressing and stamping them, and putting them in the mail. By the way, if you pay 6 bills a month at $0.49/stamp, that’s $35.28/year. If instead you used online bill pay and invested that money and got a 6% return, you’d have just shy of $6000 in 40 years. And your investment was only $1411.20.

4.  Set up your payees. Anyone can be a payee, even your mom. All you need is a name and address and your bank will send a check from your account to that person on the date you want it delivered, or you can schedule it to leave your account on a specific day. For accounts that you have an account number, include that information when you add the payee. This ensures your payments are credited to the proper account.

5.  Set up automatic payments to all accounts that charge the same amount each month. Installment loans such as car payment, student loan, mortgage, etc., are typically what you would want to set up an automatic, recurring payment to each month. Now you don’t even have to take time to schedule the payment each month, because it will be sent automatically.

6.  Finally, set up automatic transfers to your savings accounts, retirement accounts, investments, etc. This is called “paying yourself first.” Meaning, these transfers are going out every month, on the date you specify, for the amount you specify, and you no longer have to make the decision to pay yourself first, because you already made it the moment you set up the automatic transfer. And now your savings, retirement, and investment accounts are growing on autopilot.

You will likely be asked to go through a verification process of the external accounts you are transferring to. External accounts are any accounts not directly affiliated with your bank the transfer is coming from. Fidelity, Edward Jones, Credit Unions, online savings accounts offering higher returns, etc. Verification typically happens through a couple of small deposits your bank makes to the external account, which then your bank will ask you to confirm.

Only you can protect your money. We live in a consumer-driven society, and everyone wants your money. Mistakes happen, charges for $60 can be entered for $600 accidentally, and we can suddenly be charged for things we don’t want or need through banks, credit card issuers, utilities companies, and even subscription services. There’s auto-renew, one-click purchasing, app purchases, Bitcoin, Apple Pay, and more.

I encourage you to look at where your money is going and what you are being charged for. Use online bill pay to save time, and while you are opening mail and looking at statements, be sure your money is going toward its highest and best use each month, whether that’s paying off debt, building an emergency fund, and saving for an investment in yourself, your future, a house, or retirement.

author avatar
Holly Morphew AFC®, Award–winning financial coach, author, global speaker, and multi-generational entrepreneur
Holly’s own journey to eliminating $67k in debt in her twenties, reaching financial independence in her thirties, and creating 11 streams of income are what inspire her to help others live their wealthy life.
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