Is it time to automate your finances?

If you’re looking for better ways to manage your money, automating simple financial tasks could be a great place to start.

Here are our top tips to help you automate your personal finances.

1. Set up Direct Debits

Make sure important bills and repayments are automatically taken out of your bank account via Direct Debit.

You may find it easier to manage your finances if all your bills and repayments go out at roughly the same time, so you can keep track of your money throughout the month. You should therefore make sure your Direct Debits are arranged to go out at the most convenient time of the month for you. Many people choose to make payments shortly after pay day, or at the start of the month, to help them manage their monthly budget more effectively.

2. Set money aside for your savings

If you follow the 50/30/20 spending rule, you’ll be looking at putting 20% of your income into your savings. However, how much you can comfortably set aside each month will depend on your own circumstances – so do your research and work out your budget before making a decision.

Once you know how much you want to save each month, it could be beneficial to set up an automatic transfer from your main account into your savings account. This will hold you accountable to your savings goals. We know how tempting it is to spend now and worry about savings later, but your future self will thank you.

3. Consider paying your credit card balance each month

You’ll be given several payment options when it comes to paying your credit card off, including paying off the minimum amount, your last statement balance or a custom amount.

If your primary goal is to save interest, you may find it helpful to set up automatic payments so you pay off your full credit card balance each month. This will help you to avoid paying any interest on the money you borrow on your card.

4. Set up alerts

You might want to know if your bank balance falls below a certain figure, or when you send or receive payments. Many banks will give you the option to set up alerts (you’ll normally find the options under ‘Settings’ on your banking app). This is a great way to stay on top of your spending.

5. Research helpful apps

You can take finance automation one step further by utilising handy apps.

For example, some banking apps will allow you to round up purchases to the nearest pound. You’ll barely notice the difference, but you’ll be surprised how quickly spare change can add up.

Budgeting apps can also be helpful. They sync up with your bank accounts and credit cards so you can track your spending in real time. You’ll be able to categorise your expenses and identify simple ways to improve your spending habits, helping you to make savings along the way.

6. Review your automations regularly

Circumstances change and you’ll see different demands on your finances. So it’s important to keep an eye on any automations and make sure they still suit you. For example, you might decide to up your savings contributions or change your repayment dates. Review all your automations regularly and make any necessary adjustments.

The benefits of automating your finances

1. Save time

We all have different demands on our finances, and juggling priorities can be a challenge. By automating some day-to-day tasks (such as paying bills or adding money to your savings), you can reduce the time and effort spent manually managing your finances. This will also give you the headspace you need to focus on bigger financial goals and decisions.

2. Manage your budget

So you’ve set your budget… and automating your personal finances will help you stick to it. It’s great to know how much goes out every month and how much you want to put into your savings, but automation makes it easier for you to spend and save more consistently.

3. Reach your goals sooner

Let’s say you’ve set yourself a goal to save a certain amount of money by the end of the year or pay down your debt quicker. It’s much easier to skip a month or set aside less when making manual payments, whereas you’ll be more likely to reach your goals when you automate key processes such as putting money into your savings or making repayments.

4. Avoid late or missed payments

Manually making repayments each month leaves room for human error. It’s all too easy to forget to pay bills or make repayments on time – even if you’re relying on memory, calendar notifications or email reminders.

Late or missed payments can result in fees, and may be recorded on your credit file which could make it more difficult or more expensive to borrow in the future. Avoid taking any chances by making sure important payments are paid automatically.

What are the downsides of automating your finances?

One of the main downsides of automating your finances is the risk of having insufficient funds when automated payments are due come out. This could result in the transaction being declined, and you could incur penalty fees.

Keep an eye on your account balance to make sure there are always enough funds to cover any automated payments.

Make the most of Novuna’s handy app

We understand how important it is to manage your money your way. That’s why make it so easy to manage your Novuna loan. Set up a Direct Debit or change your payment date online or via our app 24/7, helping you to stay in control of your finances.

Find out more about managing your account