These days, my finances barely register on my brain. Now that I’m out of debt, it’s not a major issue for me, and I’ve automated most of my finances.
Here’s what I do to keep managing my money easy.
1. Income is streamed into my checking account automatically.
My income is all electronic, so I never deal with checks. In a couple cases, I’ve purposely set up electronic payments when previously I was sent checks. If I do get a check, I use my bank’s smartphone app to take a photo of the check and do an instant online deposit.
2. Savings & investments are automatically taken from the checking.
If it’s not automatic, I might forget about it. Forgetting about it is a good thing when it’s automatic, though — I will check every few months and see how my savings and investments have grown.
3. I often make major payments all at once in the beginning of the year.
Because I’ve been able to grow my savings account, now that I have zero debt payments, I have a good cushion so that I can pay things like rent or other major expenses all at once at the beginning of the year.
This way, I don’t worry about the payments each month, and I don’t spend money I might need for these payments.
4. Other bill payments are made automatically.
If I don’t pay in one big lump sum, I’ll set up automatic monthly payments. I never worry about paying bills. I just make sure there is enough in my checking account at all times to cover the total amount of my bills.
5. I leave a cushion in the checking for unexpected expenses.
And once the bills, savings and investments are taken care of, what’s left is basically groceries and other living expenses.
I don’t spend all of what’s left, because other things will inevitably come up, and having a cushion means I don’t have to worry about these things.
Building up a cushion took me time — after I eliminated debt, I just continued to spend little so that I could build up savings and a cushion in my checking account.
And that’s about it. I don’t budget anymore, because everything is automatic. I am not quite as frugal as I was when I was getting out of debt, but that’s the freedom of living debt-free — you don’t worry about that stuff as much.