Minding My Own Business

I advocate a leadership approach to managing money.  That means I want to spend my valuable time as a Money Leader defining my financial strategy and setting financial goals and as a Money Manager designing the necessary financial plans to achieve my definition of success and monitoring my progress/success along the way.  That requires a lot of critical thinking, research and analysis.

I am not interested in spending any of my time in the mundane details of handling my money.  I’m going to say that again, just for emphasis.  I am not interested in spending any of my time in the mundane details of handling my money.

Let’s say it together.  I am not going to be a Money Handler.

That means we need to find ways to accomplish Money Handler tasks without monopolizing our time so we can focus on real success leading and managing.  If your spouse is willing to help, you can divide the responsibilities between the two of you.  If you’re single, you don’t get much of a choice in the matter, you’re stuck with figuring out another solution.

In today’s world of the Internet, e-commerce and e-banking there exists another viable option.  You can outsource the tedious tasks.  I don’t mean hire an employee to pay your bills, but rather take advantage of modern day conveniences to automate routine Money Handler tasks.  Doing so will enable you to spend your valuable time being a Money Leader and a Money Manger instead.

Ways to Automate

• Sign up for direct deposit. Your paycheck will be deposited automatically into the bank account of your choice.  I’d be surprised if your employer doesn’t offer this service and shocked if your bank couldn’t handle its receipt.

• Sign up for online access to all your banking and investment accounts. One of best ways I’ve found to automate my Money Handler tasks has been to take advantage of on-line banking and investing.  It only takes a small leap of faith to begin dealing with your financial institutions via the Internet.  Security and convenience is important and they know it.  You’ll have a hard time finding any financial institution that doesn’t offer online access with both features.  Instant access to my accounts 24/7 means I can manage money when it’s convenient for me.

• Set up automatic transfers, if required. Each month I automatically transfer a certain amount of my paycheck from my primary bank account to higher interest bearing money market fund at a separate financial institution.  It’s the same amount, every pay period and it happens whether I remember to do it or not.

• Set up automatic bill payments. Talk about convenience.  You never have to worry about being late or forgetting a bill.  No more stamps, no more checks and no more envelopes.  Save that for your Christmas card list.

• Set up automatic investments. This is a great way to make regular investments and take advantage of dollar cost averaging.  For many years I enjoyed making investments manually (albeit electronically).  I liked the feeling of empowerment I had each time I invested in my future.  I’m disciplined, but I admit to being tempted at times to spend that money on some extravagance instead.  Putting your investments on autopilot removes the temptation and frees up valuable time.

• Use a credit card to pay for everything. Your automatic bills can be on the credit card.  Your monthly expenses can be on the credit card.  What’s the advantage you ask?  No more check writing, no more cash carrying and no more tedious balancing of your checkbook.  I truly cannot remember the last time I wrote a check and I haven’t reconciled my checking account in a couple years.  By maximizing credit card use, you dramatically decrease the number of transactions in your traditional checking account, making reconciliation almost not necessary.  A quick glance online and I can usually spot anything that might be amiss.  At the end of the month you pay your credit card automatically and electronically as well to complete the circle.  One final advantage of adopting this method is the rapid accrual of credit card rewards.  Points, miles or cash back, the choice is yours.  I personally like cash back.

DISCLAIMER - You have to be responsible with the credit card technique.  I recommend taking advantage of it, but you need to be in the habit of paying off the balance each and every month.  Carry nothing over; otherwise you can get yourself in trouble fast.

There you have it, tips to automate and simplify your finances so you can focus on leading and managing money rather than handling it.  Becoming a Money Leader and a Money Manager is vital to ensuring your long-term financial success.

How do you handle your money?  Is it automatic?

-Jeff

Learn how to manage money and mind your own business.