From Here to Financial Happiness

Day Forty Automate It

Sometimes, we forget – and sometimes we'd rather not remember.

Many of us prefer not to think about saving for the future, especially when we're lusting after some shiny new object. Meanwhile, we lose track of where we are in the month and fail to pay our bills on time. One solution to both problems: Put our financial lives on autopilot. Once we've automated our monthly finances, inertia goes from being our enemy to being our friend – and we're more likely to meet our financial commitments.

You can automate payments for all kinds of bills, including the mortgage, insurance, utilities, cell phones, cable, and more. That'll save you writing checks every month, and help you avoid late payments and the accompanying fees. Those late payments could also ding your credit score.

Keep two caveats in mind. First, make sure you always have enough in your checking account to cover these payments, or you could get whacked with overdraft, nonsufficient fund, and late payment fees. Maintaining the necessary account balance will be easier if the bills you automate don't fluctuate in size too much from one month to the next.

That brings us to the second caveat: If you automate your credit card payments, make sure you understand what's being automated. If you aren't careful, you will find that only the minimum required payment is made – which means you'll carry a balance and pay ridiculous amounts of interest. What if your credit card company will automatically tap your ...