Time to Set it and Forget It

There’s a certain satisfaction that comes with “set it and forget it.”

In the Security tier of your plan, you likely set up some elements of financial automation. However, based on your comfort with having bills paid automatically, or the amount you typically had available in your accounts, it may not have been for the full amount. For example on a credit card payment you may have set it up to ensure just the minimum or a set monthly amount was paid. This would necessitate a second payment to ensure the full amount or whatever you could afford was paid up.

Now that you’re in the Growth tier of your plan, you may have reached a stage where you’re confident you can always pay the full amount of your bills and still have a nice buffer in your liquid accounts (e.g. a checking account). You may also have the ability to increase the amount you set toward saving or investing.

Finally, if you feel you have developed healthy habits like reviewing your transactions for accuracy and/or to keep an eye on where you spend your money, there’s no harm in getting the boring work of paying your bills into a fully automated state. 

Steps to Do it

(If this looks familiar, it’s because the steps below were outlined in a previous step of the Financial Priorities plan.)

1. 1. Bills, Saving, Investing: In the notes section above, make a list of all the bills or other recurring payments you have each month, the account that will pay that bill, how it will be paid and the amount. For example:
      • Capital One Credit Card, Schwab Checking, Automatic Transfer, ~$1,500 (variable)
      • Jane Doe Landlord Rent, Schwab Checking, Bill Pay, $1,100
      • Utility Bill, Schwab Checking, Automatic Debit, ~$50
      • Emergency Fund Saving, Schwab Checking to Ally Bank, Automatic Transfer, $250
      • IRA Retirement Saving, Schwab Checking to Schwab Roth IRA, Automatic Transfer and Investment in SWYNX, $500
        
        
   2. Link Accounts: Go to the websites for your various accounts (checking, saving, investing, retirement) and start the process of linking together your different accounts at different institutions. This may take minutes or a few days depending on how your bank allows for linking external accounts.
      
      
   3. Set up Transfer etc.: Set up the automatic transfer, payment, debit, or bill pay option you planned in step one by following the prompts on the appropriate website.
      
      
   4. Set Up Alerts: Review the notes you took in step one and decide what kinds of alerts you may want to set up. For example if you know your checking account usually has roughly $1,000 of automatic payments going out around the 15th of the month, set an alert that will notify you if your account balance drops below, $1,200. This way you can ensure everything stays on track.