Let's face it: Staying on top of your finances can be a challenge. In fact, all of the money tasks you have to tackle on a regular basis can be overwhelming.
Fortunately, there is a way to lighten your load. To ditch the lengthy process of sorting through bills, writing checks and checking account balances daily, follow these five steps to put your finances on autopilot – mostly on autopilot, that is. You’ll still need to handle a few tasks manually, but these steps can make managing money matters less overwhelming.
Step 1: Make a list of bills that need to be paid
Review your bank and credit card statements to create a list of bills you regularly pay each month. Also include on that list any bills you pay annually, semi-annually or quarterly, such as insurance payments. You can also use a service such as Carefull to automatically flag recurring bills and subscriptions from your accounts.
Step 2: Consolidate accounts and ditch unused subscriptions
As you make your list of bills, look for subscription services you signed up for but aren’t using regularly. For example, you might be paying for newspaper delivery but don’t bother to read the paper, or you might have paid memberships to organizations but don’t attend the meetings or use their services.
You can save money by ditching those unused subscriptions. Plus, you'll save yourself the time of writing checks each month to pay for those subscriptions or services.
Also, if you have several bank or credit card accounts, consider consolidating accounts so you'll have fewer to manage each month. If you have multiple bank accounts, consider transferring your money to the bank with the lowest or nor fees. The sames goes if you have multiple investment accounts. If you have several credit cards, you could take advantage of a balance transfer offer to transfer balances to just one card. Or you could consider using a personal loan to pay off your credit card balances so you'll just have one monthly payment to make.
[ Read: 12 Ways Retirees Can Save Money ]
Step 3: Choose which bills to put on autopay
Automatic bill payment will make managing your finances easier. You won't have to spend time each month writing checks or logging onto your accounts to pay bills. Plus, you won't have to worry about late or missed payments if bills are set up to be paid automatically.
However, you shouldn’t set and forget all of your bills. Here’s what to consider when deciding which bills to put on autopay.
Bills you should put on autopay: It makes sense to set up automatic payments for monthly bills with payment amounts that don’t fluctuate. That’s because you know what these expenses will be and can budget for them. These bills include the mortgage or rent, car loans, cable TV, phone service and monthly insurance premiums.
Bills you should not put on autopay: Avoid setting up automatic payments for credit cards. Ideally, the balance – which can vary – should be paid off each month to avoid interest charges. However, you could authorize that the minimum payment due be paid automatically to ensure a payment isn’t missed, then log onto the account to pay more than the minimum.
Be wary of setting up automatic payments for infrequent bills such as annual insurance premiums or subscriptions. If you’re not setting aside money to cover a large annual payment, that automatic payment might come as a shock if there’s not enough in your bank account to cover it. And annual subscriptions should be reviewed rather than automatically paid to see if you still are getting value from those subscriptions.
It’s a toss-up whether to automate utility payments. You don’t want to risk paying late or forgetting to pay altogether because services could be turned off. But monthly charges will vary, making it harder to budget. If you have limited income, you might want to review utility charges and pay those bills manually to ensure there’s enough cash in the account to cover those bills. Alternatively, set up automatic payments and recurring calendar reminders to log onto your utility accounts online each month before the bills are due to see how much is owed.
Step 4: Set up payments
Once you’ve settled on which bills to pay automatically, log onto your accounts online or create online accounts if you don't already have them. Keep a list of the usernames and passwords for the accounts or use a password manager such as Dashlane or 1Password. If a service provider doesn’t offer automated bill payment, you might be able to set up online payments to that provider through your bank.
If you're retired and receiving Social Security benefits, you should be receiving those payments electronically. Make sure you create a my Social Security account online to manage payments. Also, make sure that any pension payments you receive are being deposited electronically to save yourself the time and hassle of having to depost checks.
Step 5: Set up account alerts to making monitoring easy
You can easily monitor your bank account activity by setting up account alerts. For example, you might be able to get notifications by email or text message when transactions are made and when the account balance drops below a certain level. That way, you’ll know if a bill is paid and the account balance has dropped too low.
Log onto your bank account, click on the “alerts” tab (which might be in “settings” or “profile”) and select the alerts you want to receive. You also could set up calendar alerts on your mobile phone to be notified when bills that must be paid manually are due as a reminder to pay them. Additionally, tools such as Carefull can automatically let you know if anything is slipping through the cracks. Taking advantage of technology will make it easier to stay on top of your finances.