SMART WAYS TO MANAGE MONEY
Can I streamline my finances with automatic processes?
SET IT AND FORGET IT! THAT’S one of the things I love about living in an automated world. With a little work up front, you can put processes in place that save time and money, even when it comes to financial matters. Here are three of my favourite ways to automate personal finances to help simplify your life and, hopefully, grow your wealth.
CREDIT CARDS
Have you ever misplaced a credit card statement, only to find it a day or two after the due date? If you have, then you know that interest charges start accruing right away and can quickly add up. On top of this, missing your payment for an extended period of time may negatively affect your credit score.
An easy way to avoid this is to set up automatic credit card payments. Typically, your bank will offer you two options to pay your credit card automatically: make the minimum credit card payment or pay the entire balance each month. Once you set this up, you never have to worry about forgetting to pay your credit card by the due date again.
SAVINGS
Are you finding it hard to save for your retirement, build an emergency fund or set aside money for a down payment? You can start preauthorized contributions (PACs) with your financial institution where a certain amount of money moves from your chequing account to your investment account, such as a registered retirement savings plan (RRSP) or tax-free savings account (TFSA), on a regular basis.
If you set up PACs to take place every time you get paid (say, every two weeks), you won’t even notice the money being transferred to your investment account. And, more importantly, you’ll begin to build your savings over time without having to lift a finger.
Similarly, your employer may offer a savings plans at work where contributions are deducted directly from your pay cheque. This is another great way to build savings without having to do a thing.
INVESTMENTS
Once you’ve saved money in an investment account, how can you automate the actual investing of your money? One option may be to look into “robo-advisers,” which are online platforms that manage your investments and rebalance your portfolio on a regular basis with software – that way, you won’t have to figure it out yourself or rely on an investment adviser to do it for you.
Such platforms can be good if you want a hands-off approach to investing and don’t want to worry about making day-to-day decisions. With that said, if you prefer to be highly involved with your investments and want more sophisticated and integrated wealth planning, a human adviser may be the best option for you. is an associate portfolio manager at Manulife Securities