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Putting Our Finances on Auto-Pilot…

May 24, 2011

I’m kind of hoping my wife won’t read this particular post, because I’ll get months of ribbing. I can’t take months of ribbing…

For years now, one complaint (not the one complaint, just one complaint of many that I deserve) my sweetheart has had about me is that I leave my clothes in the most convenient place I can find when I remove them. And, it is never convenient to hang them up. There are a lot of reasons why I just drop my clothes on the bed, or floor, or chair, or almost any other place (other than the closet…). Admittedly, none of those reasons are very good.

I finally found a way out of this habit. I made one little change in the closet, and now my suits typically (not 100% there yet) find their way back into the closet right as I take them off. I changed where I hang my pants.

For almost 20 years, I have put both my pants and their accompanying suit coat on the same hanger. You know, so that the pants are right there with the jacket. But it was such a pain, because I take my jacket off first, then hang it up, then I remove the pants, then I have to take the jacket off the hanger so that the pants can go on the hanger first. Then the jacket goes back on the hanger, over the pants. Exhausting…

A few weeks ago, it dawned on me that I could hang the pants on its (is it “its” or “their”?) own hanger, and hang the jacket on its own hanger. For some reason, that small decision has shaved like 30 minutes off of my day. Now I hang my suits up when I get home. Simple. And that is the key.

At this point, you must be thinking one of two things. One, how could she possibly have married a guy like that? Or, two, how did a grown man become so lazy. I can’t answer either. But it has taught me something about finances. One simple change in the way you do things may allow you to be much more successful at sticking to a goal…

One small change we’ve made in our finances that has allowed us to be more successful is that we’ve put many parts of our financial life on auto-pilot. Things that used to seem hard to do, financially, now get done with no effort on our part. Here are a few examples of some things that are on auto-pilot:

  1. A portion of each one of my paychecks goes directly into savings each month. We never miss it. It has been a great way to build savings without having to make a “do we set money aside this month for savings?” decision each paycheck. I arranged the direct deposit amount with my Human Resources Department.
  2. We put money away each month into our employer-matched 401K. This is also taking right out of the paycheck, before I ever see it. This is also a HR Department thing…
  3. Each year, when I get a modest raise, the percentage of my paycheck that we send to the 401K increases by 1%. At this point, we’re contributing 10% of my pay, and the employer is matching 4%. Not too shabby. And since it happens about a week after we receive the raise, we don’t even know the money is gone.
  4. Most of our bills are on auto-pay*. Not that paying bills is that hard of a thing to do; it’s just tedious. So, all of our monthly bills come out of our account at the same time each month. This is easier, because it doesn’t matter to us when we pay each bill during the month. I like them all paid early in the month, and since we’re using last month’s money, the money is always in the account. Once we’ve been in our home for over a year, we’ll put all of the utility bills on the equal pay program, so that the amount will be exactly the same each month throughout the year.
  5. Auto insurance and life insurance bills are on auto-pay. Years ago, we used to pay auto-insurance each month. No big deal, but it cost us about $2 a month to pay it that way. We finally started paying every six months, and have saved the $2/month charge. Plus, we don’t have to remember to pay them, so we’re always covered as far as insurance goes.
  6. Saving for things like insurance is now on auto. We calculated how much we’d pay each year in insurance premiums, etc., divided it by 12 (months), and save that much each month. It goes straight out of the check and into savings. Then we pull it out when it is time to pay those bills.
  7. Maintenance is kind of on auto-pilot. On my smart phone, I use “To-Do” as my application for getting things done. Each month, an alert pops up on my iPhone reminding me to check the air filter on the furnace, and the salt in the water softener. This makes routine maintenance a little easier to remember, thus saving our home costs (at least a little bit).
There are some reasons to be careful when automating your finances, and we don’t have everything on auto-pilot. Here is a great post on some of the pros/cons of automating your finances. I was a little wary of putting certain bills on auto-pay because I didn’t trust the site/automation software the company was using. We had a few months where the bill wasn’t paid correctly because of either my error or theirs (theirs…). But those things are being resolved and most of what we do it now done automatically, without much worry on our part.
*The only bills not on auto-pay are the house bill and the credit card. We still pay those each month, but I like to really search the credit card bill, and we were having trouble getting the house payment to auto-pay. Now I think that is solved and we’ll probably put that on auto-pay from here on out.
Anything I’ve missed? Are there any obvious places we should or shouldn’t be automating? Please share!
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4 Comments leave one →
  1. Eric M permalink
    May 24, 2011 7:01 am

    Great post! The only problem I have run into with Auto-Pilot Bills is that I have a tendency to not check the bills on a regular basis to ensure that hidden fees or billing errors aren’t creeping in. Adding regular checkups to my “To Do” list is a must for me.

  2. Emily Shepherd permalink
    May 24, 2011 6:37 pm

    My dad has our cell-phone bill on automatic, but he requests that they send him a letter every month so that he can see what we’re paying and whether or not my mom and I go over (thus causing us to have to pay extra).

  3. June 20, 2011 10:31 pm

    Is the app you use “Todo” the $4.99 one? I’d like to get for my iPad.

    • June 21, 2011 9:40 am

      Yepper….Love ToDo…best $5 I’ve spent in a long time…unless you count Coldstone Icecream yesterday…

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