Planning Your Future
5 Time-Saving Tricks to Managing Your Finances
Because Time Is Always Money
Despite reports by the Federal Reserve Bank of Boston that show we have more leisure time than we did 40 years ago, most of us still rush from one activity to the next frazzled, stressed and concerned about our growing to-do lists. One consequence: For many, money management becomes a neglected chore.
As these personal finance experts attest, though, it is possible to manage your budget in minutes a day. These time-saving tips, tools and strategies will help set you on your way to becoming a bona fide money master.
1. Budget now; save time later. Financial management starts with a budget, a document showing your income and expenses by category on a weekly, bi-weekly or monthly basis. To begin writing a budget, find a quiet time and place to stay focused and review and record your income and expenses. Whether you do this in a marathon session or collect the data over time is up to you.
"If you track how much you spend outside of bills for a few weeks, within a month you'll have an idea of your recurring expenses," says Jennifer Gniadecki, a blogger who has covered personal finance for more than 10 years and has budgeted her way through a foreclosure to financial stability. While acting on this tip takes time upfront, having a budget will make every aspect of financial management faster in the future.
"Once you know how much you spend on discretionary items you can budget that amount for next month and start to get into the habit of really knowing where your money is going," says Gniadecki. Then you can allocate funds for bills, savings and to pay down debt (if you have any). Plus, having a budget takes the guesswork out of money management and allows you to automate many of the steps involved to save time. Gniadecki says it takes only 10 to 20 minutes a week to keep your budget on track once it's established.
"When I first started budgeting, it took a few hours a week to keep track of everything," says Gniadecki. "Now I don't spend more than 10 minutes on my budget, usually on payday."
2. Find a budget program that works for you. Popular personal finance apps can be linked to your credit, debit and bank accounts to automatically track your income and spending. Some budget programs also let you pay bills directly through the app. Many are free, but don't be afraid to spend a few dollars a month if you find one you really like, says Gniadecki. "Just like working out, if you can find a budget program that makes you feel good when you use it, you will continue to use it."
3. Automate as much as possible. It might be a no-brainer, but automating bill-paying and savings transfers saves time and money. Some utilities and credit card companies even offer a small account credit when you set up automatic payments. And because your payments are pre-scheduled, you're likely not to pay late fees. Best of all, automating these tasks frees you up to look at the big financial picture, says Jim Wang, founder of Wallet Hacks, a personal finance blog offering unconventional strategies for success.
"The less time you spend on mindless tasks, the more time and energy you'll have to plan for the future," he says. This includes evaluating long-term savings goals, considering investment opportunities and looking for ways to improve your budget by finding areas where you habitually over-spend, says Wang.
"You want to spend time being proactive, so you can continue to increase your savings and financial stability," he adds. If you aren't comfortable with automatic bill pay—maybe because your paychecks are irregular—use a credit card to pay bills automatically, then pay the credit card bill on time. Gniadecki uses this tactic and says, “It saves us time and hassles."
4. Pay bills once a month. For bills that can't be automated, Wang suggests calling and asking to have your due date changed so all your bills are due around the same time. "It makes everything a lot easier to manage, and you only have to call once to set it up," says Wang. Even if you automate your bill paying, you can still save additional time by having all payments processed around the same date. Whether you need to transfer funds to an account so the payments clear or just check in and make sure the payments have been processed, "it consolidates all these different dates into one day," says Wang, "so you don't have to remember to deal with one bill on the 15th, another on the 20th, and so on."
5. Check in weekly. Spend 10 to 20 minutes a week glancing at your accounts to stay on track, so that you don't have to spend hours reworking your budget after it has fallen apart from neglect. It doesn't have to feel like work. Do it with your spouse over dinner or after the kids have gone to bed. Make sure you haven't overspent, note unexpected expenses and look ahead to ensure you haven't forgotten any necessary expenditures.
"Once you have the budget established, this meeting doesn't take long," says personal finance and life coach Debbi King. "You just want to make sure you're still on course." Mark your calendar to avoid the pressure that comes from squeezing another task into an already-packed schedule, recommends Wang.
Parkinson's Law tells us that work expands to fill the time available; shave hours off money management tasks by allocating no more than 20 minutes a week to work on it. "When you set aside a specific time for budgeting, you take the stress away," Wang says, "and you'll get the work done in that time frame since you've blocked it off." Even if you stray from your budget from time to time, focusing on money management 10 minutes a week will ultimately help you reach your financial goals.
"Just paying attention can be a huge key to success when it comes to money," King concludes.
Dawn Allcot is a freelance writer whose articles have appeared in Mint.com, AOL Careers, Yahoo! Finance and more. She is a regular contributor to Chase News & Stories.