Don’t Automate your Personal Finances and Forget About Them

iStock_000007880416XSmallAutomating your personal finances is key to simplifying your finances. It is what I recommend to everyone. Automating makes things a lot easier as well as enables you to spend less time sorting your mail and paying your bills and more time doing the things you want to do. Yes automating your finances will change your life forever but you can not just automate and forget about your bills. Well you can but you may discover some additional charges several months later or worse you may end up having some services disconnected if you forget. I am not saying do not automate your finances but I am saying you want to put some checks and balances in place to monitor your finances to make sure everything is working as planned. Here are some things you want to put in place to make sure everything is working properly when you automate your personal finances.

REVIEW YOUR STATEMENTS – reviewing your monthly statement to make sure the bill payment was received on time and you did not incur any late fess. Also want to make sure the payment date you established for the payment to go out provides enough time so it is processed on time. Many times we just pay the bill since it automated without reviewing the bill. After its paid its to late to dispute but you can always try.

REVIEW PAYMENT WAS MADE – Check to see if the payment is sent out or if your credit cards was charged on the day that you designated. To do this set up an alert or set a date in your calendar to view if payment was done. One way to make it simple is to try to set all payments to be sent and charged to credit card on the same day or within a few days of each other if possible. This way you will only have to check once per month to make sure all payments were made.

CORRECT AMOUNT CHARGED – Not only do you want to make sure the payment was sent or charged, you also want to make sure the correct amount was paid. You would hate to underpay your bill and be charged interest or possible late fees.

Automation is key to simplifying your personal finances but supervision is even more important. So establish a checks and balances system to make sure all of your bills are paid as you have set up. This will save you time and give you a peace of mind knowing that your bills are paid and you only have to check to see that they were done once a month.

Are you practicing safe credit card usage?

credit card flying with youWe all love to use credit cards for their convenience but are you using them to help simplify your personal finances or is your credit card usage making your personal finances more difficult.  For example, we sometimes forget to make that monthly payment or our balance keeps getting larger and larger and we feel overwhelmed.  The only way to stop the bleeding is to stop using the credit card completely.  However, if you use your credit card properly you will not have to stop using the credit instead you can use the credit card to your advantage.  It can even become a valuable tool to use to simplify your personal finances.

Here is what you need to do to make sure you are practicing good credit card usage:

Payoff your balance at the end of each month – This is a must do every month.  If you want to simplify your finances as well as avoid unnecessary debt you must pay off the balance each month.  If you do not you will be paying unnecessary interest payments.  So only charge what you can pay off at the end of each month.

Spend within your budget – Do not charge things that you are unable to pay off.  If you did not budget for the purchase this month do not use a credit card to pay for it.  Yes, I know it is very easy to just use your credit card because of the convenience.  But think before you use it.  Also you do not want to spend more than your credit card limit.

Pay on time - make sure your credit card payment is paid on time.  If not you will incur those dreaded late fees.  One way to avoid this is to set up auto pay from your checking account to pay your credit card to make sure it is paid on time.

Avoid applying for unnecessary cards -Yes you may receive an offer for zero interest for six months or receive ten percent off on your purchase.  But think before you say yes to this offer.  Why do you want to add an additional card to your existing credit cards.  That is just another card payment you have to keep track of.  Before signing up for new credit card call your existing card company to see if they will match the offer you received.  Think before you say yes and ask yourself does this card fit my lifestyle and do I really need another card?

Limit the number of cards -You do not want to carry more than two credit cards with you.  Why would you need more than two cards?  The more cards you carry the more likely your going to spend.  Also if by chance you lose your purse or wallet that’s one more card someone can have access to.

Monitor your interest rate – Know how much interest your being charged.  Many times you do not know the interest rate you are paying because the balance is paid off at the end of each month so your not charged interest, which is a great reason.  However, if you are carrying a balance you may be charged a high rate of interest when its not justified.  Also your credit card company may raise your rate from the time you initially signed up for the card so you want to monitor the rate.

Reduce your credit card debt – If you do not have any outstanding credit card debt congratulations but if you do have outstanding debt you want to reduce this debt as quick as possible. Getting out of credit card debt is not easy so set a goal to begin reducing this debt.  You will be amazed at how much you can accomplish by simply setting a goal and taking action to reach your goal.

If you want to simplify your personal finances take action now by following these simple tips to make sure your practicing safe credit card usage.   Which tips do you plan to implement now.  Do you have other tips which have helped you simplify your credit card usage?