How to Manage Your Money Like a Pro with Automation

Have you heard of decision fatigue? The idea is pretty simple. According to this article from the AMA, decision fatigue refers to “the idea that after making many decisions, your ability to make more and more decisions over the course of a day becomes worse.” Thanks to this phenomenon, it pays to reduce the number of decisions you need to make in a day. That’s where automation comes in.

Automation = Better Financial Habits

Automation is your money’s best friend. By automating your finances, you reduce your opportunities for decision making and decision fatigue, thereby reducing your chances to change your mind about saving money or paying a bill in full. By reducing your decisions you set yourself up for success! Automation can build up your savings and pay off your bills, without any extra effort on your part. So, how can you use automation as a financial tool?

Automate Your Bill Payments

There are many different facets of your finances which can benefit from automation. Automating your bills is a good place to start. Many banks have online bill pay options available that help you pay your regular monthly bills on time. In particular, automation is a good way to ensure you always pay your credit card balance in full, so that you don’t accrue any interest fees. However, one important thing to be aware of when automating your bills is that you will need to stay aware of your bank balance, to avoid over-drafting your account. As long as you keep an eye on your balance, automating your bills is a good way to avoid late fees, build good credit, and stay on top of your finances.

Automate Your Savings

The other major arena of your finances that definitely deserves some automation-attention is your savings. I touched briefly on automating your savings in an earlier article, which you can read here. The most important thing about automating your savings is that if money automatically gets moved out of your spending account, you have no chance to spend it. That makes saving that much easier! We do this with our retirement savings, and it really helps us keep it up. A great resource for further information about automating your savings is The Automatic Millionaire by David Bach.

If you liked this article and want more tips on financial organization that will make your life a LOT easier, you’ll probably enjoy a free copy of my eBook, 9 Secrets of Financial Self Care. Click here or below to download it!

By |2023-04-27T08:04:53-07:00April 27th, 2023|Categories: Banking, Financial Clarity, Money Mindset, Personal Savings, Personal Spending|Tags: , , , , , , , , , , |0 Comments
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How to Create a Spending and Income Plan, Part One

Planning ahead with your money is absolutely essential to leading a successful and stress-free life. Creating a spending and income plan for the month ahead can help you achieve your vision of financial freedom. Today, let’s get into the nitty gritty details of how to create a plan that will move you towards your financial goals. 

The ideas I’m going to share here are not new ones, but they are time-tested and solid. Many of my clients have worked with these processes, and I also take inspiration from my mentor Karen McCall, founder of MoneyGrit.(R). This article is part one of two, and these are the first two steps in the 5-step process. Let’s jump right in: 

Clarifying Your Spending

There are a couple ways to do this. I often recommend that my clients sit down with the past three months of their bank and/or credit card statements. (For most of us, these should be available online). Then, I ask them to go through line by line to see where money is really going. 

Karen McCall is a proponent of having people closely track their finances. She reports that the act of tracking every dollar is enough to bring a new level of mindfulness and intentionality into our spending. In her book Financial Recovery, she writes: 

“While people are hesitant to track because of what they fear they’ll have to give up, it is far more often the case that they get more of what they need and want by eliminating unconscious spending.” 

Tracking can be a longer process than simply reviewing your financial records retrospectively, but both bring great insight into where your money is going. Try both and see which works best for you! 

Clarify Your Income

Often when I say this, people immediately think specifically about the money they earn from their job. While this is definitely in the category of “income”, it’s likely not the only thing. Total up all your estimated income from various sources, like selling used items or rental property income. If you need to, you can go back and review all your income information that your bank statements provided you and use that to make an educated guess. 

If you are self-employed or in another situation where your income varies month-to-month, it’s still very important to complete this step. Make a conservative estimate of your income to avoid coming up short, or go through the process of setting up a money system and a solopreneur paycheck for yourself! See my article “How to Create Your Own Paycheck Using a Money System.”

Stay tuned for Part II – and make sure you take breaks and pace yourself through this process.

If you liked this article, you’ll probably love my e-Book, 9 Secrets to Financial Self Care. Get your free copy here!

By |2022-08-19T11:15:30-07:00August 19th, 2022|Categories: Financial Clarity, Money Mindset, Personal Spending|Tags: , , , , , , , , |0 Comments
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Why Planning Ahead is Key to Financial Success

How many times have you looked at your financial decisions only in hindsight? People often relate to their money that way – only examining their spending once the money’s been spent. While reflection is all well and good, planning ahead can make a big difference.

This month, we’re talking about creating a proactive plan for your spending and income. This plan is meant to orient you towards the future. Making decisions about where your money will go in the time ahead can be impactful for several reasons. Let’s talk about why this technique is so key to financial success!

Avoid Missteps Before They Happen

Sometimes we look over the money we spent in the past month, or check in with our income, and realize we made a couple missteps. We might have been living above our means, or spent a lot of money on something that didn’t really matter to us. These things might prevent us from having the finances and life that we want to have.

For example, unintentionally spending big in one place might result in us not being able to pay down a debt later in the month. Or, we might be unable to get a friend a birthday present. We might have overestimated our income for the month and find ourselves with less than we need.

Planning ahead and sticking to our spending and income plans can help us avoid these situations.

Anticipate Big Expenses

Rather than checking in on your money only when you fall short or have a big expense, planning ahead can help prevent this situation entirely. Here’s a great quote from my mentor Karen McCall, founder of MoneyGrit. (R):

While driving, no one would keep her eyes only on the rearview mirror, never looking through the windshield at the road ahead. To be fully mindful about your money, you have to look forward too.

When you have a spending plan in place, you’re able to relate to large upcoming expenses as things to plan for, rather than things to freak out about. This is a game changer and can help you think about the rest of your spending and income, and how it will be affected by the expense or situation.

Less Stress & More Intention

At the end of the day, creating a spending and income plan is really about is being good to yourself. The more you can make relaxed, proactive decisions about money, the more you can eliminate financial stress from your life. When you create a plan for your spending and income that’s based on creating a life you love, that money and how you spend it become more fulfilling for you.

Planning ahead can create financial stability, and it can also create greater life satisfaction. Isn’t that really what financial success looks like for most of us?

If you enjoyed this article, you’d probably enjoy my free e-Book, 9 Secrets to Financial Self Care. Click below to download your free copy!

By |2022-08-11T12:42:55-07:00August 11th, 2022|Categories: Financial Clarity, Personal Savings, Personal Spending|Tags: , , , , |0 Comments
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Book Review: The One Thing

At Peace With Money: Book Review: The-One-ThingThis summer, I read The One Thing by Gary Keller (no relation), and my initial reaction was irritation. Essentially, the book advises us to focus on one big goal that you want to accomplish and then break that goal down into smaller time chunks.The goal is to do something small to work toward that goal every day. The key is focusing. That’s probably why it irritated me.

Staying focused is definitely something that I struggle with. As a business owner, as a wife and mother, as a person in today’s world of distracting gadgets – focusing is difficult!  It seems there is always a fire to put out, a need to be met. Always there is an idea that is nibbling your brain, or a rabbit hole to dive into and lose 45 minutes of your life. My reaction was about something I need to work on in myself rather than the idea the author presents.  

He also suggests scheduling that focused time into your calendar and protecting it – another challenge for me. On top of that, he debunks the idea of multi-tasking. This felt blasphemous to me at first. What mother do you know who does not pride herself on juggling multiple balls in the air on a daily basis!?! It seemed to me that Gary Keller was basically trying topull the rug out from under my life! This book made me so angry that I had to take a few months to calm down enough to even write this review.

Practical Applications

But somehow, this morning I woke up thinking about this book again. A practical example to apply his basic techniques popped into my mind. Let’s say you want to save $30,000 to buy a house over the next 5 years. That sounds like a lot of money to save and a crazy goal! But if we break it down to saving $6,000 this year and saving $500 each month which means saving about $17 each day, it becomes manageable. To reach this goal, we ask, what’s the one thing we can do today to get that started? Perhaps you open the savings account. Maybe you start a side hustle and allocate all the income to that goal. You might start saving your cash in a money jar to deposit at month end. Maybe you resolve to pack your lunch.

The One Thing Book Review: At Peace With MoneyWhat’s important is getting started by taking some action today to make the goals you have for your future turn into a reality.  That is a lesson I can take from this book.

I might have to work on my focus, and reexamine my views on multitasking. However, I do feel I stand behind the ultimate message of this book: get clear on your goal, focus on it, and work towards it every day. If you do that, you will achieve what you’re after. Whether that’s saving for a house or starting a business, this is an important reminder in how we approach our financial goals. If you need an accountability partner to help you get started, please feel free to reach out.  I would love to help you reach your goals (and I promise not to forbid you from multitasking!)

 

☮

Angela

Image Sources: Squidhub, Bonehead Business

By |2018-09-12T02:27:30-07:00September 12th, 2018|Categories: Financial Clarity, Money Mindset, solopreneurs|Tags: , , , , , , , , , , |0 Comments
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How To Pay Yourself First

How To Pay Yourself First: At Peace With MoneyI use the hashtag #PayYourselfFirst all the time, but what does it really mean to pay yourself first? It’s a core aspect of Profit First philosophy. It’s also an important part of how I organize my own personal finances. I want to make sure all my readers know how to pay themselves first, in their business and personal finances, so let’s dive in.

Keep What You Earn

“Paying yourself first” is about having a system in place to make sure that you get to keep a portion of your earnings. In my last post on automation, I talked about David Bach’s book, The Automatic Millionaire. Bach includes the concept of paying yourself first in this book and applies it to personal finances. He suggests setting aside savings right off the top of every paycheck, even before breaking it down for living expenses. Users of this system do quite literally pay themselves first! In his system, the money goes to retirement savings accounts, but the system can be adjusted in both business and personal finances to fit your own needs.  Taking a cut for yourself from each paycheck is and important but easily forgotten practice.

Beyond Corporate

So, how does this apply to solopreneurs? If you’re working outside the corporate world, you’re probably working without health and retirement benefits. This is all the more reason to set up a system to take care of these needs. Setting aside money to address health and retirement costs is important for many people, but especially so if your main source of funding for both is your own business. 

How to Pay Yourself First: At Peace With Money

I always say I want to help my clients work with the Profit First system to align their business profits with their life goals, and I assume one of those goals is to support yourself in your health and retirement! Every financial aspect of your business can be set up with this in mind. Your products should be priced appropriately so that you earn something for yourself, rather than just simply covering costs. A part of that money should be invested into your future and your healthcare fund. This is the Profit First system at its core. This is what I want to help solopreneurs work towards with their businesses.

Take a look at your personal and business money systems and ask yourself, do you pay yourself first? Are you setting aside money to support and reward yourself? If you’re interested in more on this topic, I highly suggest downloading the first 5 chapters of the Profit First book through my website.

 

☮

Angela

Image Sources:  Alisa Anton, zixuan Fu

By |2018-06-25T20:39:19-07:00June 18th, 2018|Categories: Financial Clarity, Money Mindset, Profit First, Small Business, solopreneurs|Tags: , , , , , , , , , , |0 Comments
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Why Automation Is Your Money’s BFF

Why Automation is Your Money's BFF: At Peace With MoneyAutomation is your money’s best friend. By automating your finances, you reduce your opportunities for decision making, thereby reducing your chances to change your mind about saving money or paying a bill in full. By reducing your decisions you set yourself up for success! Automation can build up your savings and pay off your bills, without any extra effort on your part. So, how can you use automation as a financial tool?

Automate Everything!

There are many different facets of your finances which can benefit from automation. Automating your bills is a good place to start. Many banks have online bill pay options available that help you pay your regular monthly bills on time. In particular, automation is a good way to ensure you always pay your credit card balance in full, so that you don’t accrue any interest fees. However, one important thing to be aware of when automating your bills is that you will need to stay aware of your bank balance, to avoid over-drafting your account. As long as you keep an eye on your balance, automating your bills is a good way to avoid late fees, build good credit, and stay on top of your finances.

The other major arena of your finances that definitely deserves some automation-attention is your savings. I touched briefly on automating your savings in an earlier article, which you can read here. The most important thing about automating your savings is that if money automatically gets moved out of your spending account, you have no chance to spend it. That makes saving that much easier! We do this with our retirement savings, and it really helps us keep it up. A great resource for further information about automating your savings is The Automatic Millionaire by David Bach.

I hope this motivates you to try out automation with your finances!

☮

Angela

Image Sources: Mitch Lensink, Lucas Silva Pinheiro Santos

By |2018-06-11T19:43:23-07:00June 11th, 2018|Categories: Banking, Financial Clarity, Money Mindset, Personal Savings, Personal Spending|Tags: , , , , , , , , |0 Comments
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Young and Thrifty: Creating a Spending Plan

How to Create a Spending Plan: At Peace With Money

Creating a spending plan, also sometimes known as a budget, can be a very important tool for getting a handle on your finances no matter where you are in life. In my last Young and Thrifty post, we briefly touched on budgeting as a way to encourage saving habits. Today, I want to look more closely at 3 different types of spending plans. Maybe you’ll find one that works for you! But first, the budgeting basics:

Analyze Your Expenses

The first step to creating almost any spending plan is to analyze your expenses. Figure out what your fixed expenses are, like rent or mortgage payments, transportation costs, food, etc. These types of expenses are things you really need that tend to cost the same amount every month. After you’ve confirmed what your fixed expenses are, you can analyze the rest of your spending habits and determine which of your expenses are flexible, and not as necessary as your fixed necessities.

Once you’ve evaluated your finances in this way, you can start to take charge of your spending using various strategies.

Categories

The most common budgeting strategy is to divide your expenses into specific categories and assigning designated not to exceed amounts for each category. For example: “Food, $200/month, gas, $150/month, etc.” Doing this can help you establish your monthly living expenses and also help you understand how much you spend on each category. If you wish to cut down on your spending in a particular area, this may be a useful strategy for you.

Set Amount for Flexible Expenses

Another strategy that is helpful when you’re really focused on saving is setting aside a set amount of money for all expenses that lie outside of your fixed necessities. When my oldest daughter was setting a budget while saving for her road trip, she set aside $100 a month for all expenses that weren’t fixed necessities. This might be tight for some, but setting an amount in this way is a very simple budgeting tactic that can encourage you to make your spending more intentional.

Rewards

A third tactic that can help you create a spending plan you’ll stick to is to set aside rewards for yourself. For example, if you have $500 to spend on a certain monthly expense, and you manage to only use $480, you can use that extra $20 to reward yourself. This can be applied to your overall monthly expenses or within certain categories. One of my daughters has found this strategy very motivating and usually ends up using her reward money on ice cream.

Resources

There are two digital resources I can recommend for anyone looking to create a spending plan. Mint and You Need A Budget are both digital budgeting software systems that will help you set up and track your monthly budget. From my personal experience, I enjoy Mint, and my family uses their free version. Amber Dugger really appreciates YNAB and uses it with her clients.Creating a Spending Plan: At Peace With Money

Though this article mentions only a few strategies, budgeting and spending plans can be as simple or complex as you need them to be. I encourage you to do more research if you’re interested. I recommend this article from Practical Money Skills and this podcast from Jen Hemphill as two helpful resources. In a later post, I will be putting together a list of some of my favorite resources for financial self-education.

I hope you find these spending strategies useful. Stay thrifty!

☮

Angela

Images:Camille Orgel, Unknown

By |2018-06-04T19:29:35-07:00June 4th, 2018|Categories: Financial Clarity, Money Mindset, Personal Spending|Tags: , , , , , , , , , |1 Comment
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My 2 Easy Must-Do Rules for Personal Financial Success

flowers and planner on desk

Today I’m sharing my top two easy must-do tips for personal financial success. My husband and I have done two things that I believe without question were key to getting us ahead in our personal finances.

First, we have always contributed to our employer retirement program. Even if we felt like we had to scale it back at some points, we still always participated. If your employer offers a matching contribution – even better. If you have an employer retirement program available to you, contribute to it! If you’re self employed, you still have options. Setting up a retirement planning system to regularly contribute to your financial growth and personal gain will only help you in the long run. This is exactly what the Profit First methodology I specialize in is all about!

2 Rules for Financial Success

Second, we always pay our credit cards in full every month. Even if this meant going on lockdown with our spending, we did it. Early on, we made the decision that we would not carry balances on our credit cards.

By establishing these two golden rules years ago, we set the course for financial success.

☮

Angela

Image Source

By |2018-03-13T03:10:35-07:00March 13th, 2018|Categories: Financial Clarity, Personal Savings, Personal Spending|Tags: , , |0 Comments
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