Ask any mom entrepreneur if she’d like to save time and money and you’ll hear a resounding YES!
Ask any mom entrepreneur if she’s good at managing her personal and business finances and you’ll hear a resounding NO!
Well all that’s about to change with the help of Ramit Sethi’s 5 Steps To Automatic Money Flow.
According to author of The New York Times best-selling book and blog I Will Teach You To Be Rich, Ramit Sethi, the trick to managing your finances and saving time & money isn’t willpower or doing away with your daily latte – it’s automation, a key fundamental in money management that will help you save more money and more time.
Automation lets you enjoy those small things you love, like lattes or designer jeans, while ensuring that your savings account automatically grows each month. Automation saves you time, since you won’t have to handwrite checks, stuff envelopes or drive to the post office. Automation can even increase your credit score by preventing missed payments that can cause your credit score to drop as much as 100 points – and a better credit score might help you get that loan you need to launch or expand your business.
Ramit shares with The Mogul Mom his 5 steps to creating an Automatic Money Flow to manage your personal and business finances:
1. List your accounts in one place.
To set up, compile a complete list of all your bank and credit card accounts, their URLs, the logins and passwords. Ramit recommends 1Password to store this information.
2. Link your accounts.
Log into each account and link your accounts together to set up automatic transfers from one account to another by using the “Link Accounts,” “Transfer,” or “Set Up Payments” options. Connect your paycheck to your 401(k), so it’s automatically funded each month; your checking account to your savings account; your checking account to your investment account/Roth IRA; and your credit card to any bills you’ve been paying by using your checking account. Link bills that can’t be paid by credit card, like rent and loans, to your checking account and use the bill-pay feature. Have all your credit card accounts paid from your checking account. The links are free and electronic, but allow three to five days for the accounts to verify the links.
3. Organize and consolidate your billing dates.
You’ll want to reset your billing cycles to create a well-timed Automatic Money Flow. Gather all of your bills and call the companies to switch your billing dates. Most of these will only take five minutes to do, but once it is done all of your bills will arrive at the same time, and you can now go into your accounts and set up your transfers.
4. Set up your automatic transfers.
Once your accounts are linked together, set up the core of your Automatic Money Flow: automatic transfers and payments. Work with each individual account’s website to make sure your payment or transfer is set up for the amount you want and on the date you want.
5. Tweak the system.
You may need to adjust your Automatic Money Flow to match your payment schedule. If you have irregular income, making your accounts automatic may be harder to do, as the amount in your accounts will fluctuate – but it can be done. Decide what you need to live on, and add a savings goal of three months. Once you have saved up for three months, you may start investing your money into other accounts.
Now your money management is on autopilot. Not only are your bills paid automatically and on time, but you’re actually saving and investing money each month. It works without your involvement and it’s flexible enough to add or remove an account any time. You’re accumulating money by default, and saving time and money.
Ramit’s automation system has helped thousands of people automate and get on with their life so they can live a rich life by focusing on the things that matter.
Ramit is regularly featured in The New York Times and The Wall Street Journal. He has been a regular guest on ABC and has appeared on The Today Show and NPR. He graduated from Stanford with undergraduate and graduate degrees, where he studied technology and psychology. He recently moved from San Francisco to New York City.