It’s hard to develop good money habits. It’s especially hard when those habits include delaying gratification and cutting back on impulse purchases. When it comes to money, too many of us opt to satisfy all today’s wants instead of securing tomorrow’s financial freedom.
“Even though we know that small changes can have a big impact over time, we often lack proper motivation – or discipline – to do what’s right today for our future selves, particularly if we have to keep it up for a long time,” says Jikku Joseph, Managing Director at 22seven, a personal finance planning tool developed by Old Mutual to assist consumers with financial planning, budgeting, and investing.
This is where our automated financial systems can play a valuable role: the same automation that ensures your debit orders go through on time can help you develop healthy money habits.
“Use the opportunity provided by automation to track your expenses, manage your money, and save and invest wisely. The benefits of saving and investing for the future and having the right financial solutions in place cannot be underestimated,” says Joseph. “Let automation help you get and stay on track.”
Joseph lists five ways you can make automation work for your future:
1. Get a personalised budget based on your actual income and expenses
The free 22seven app generates a budget for you, based on your actual behaviour. By connecting your accounts, such as your bank, savings and investment accounts, it enables you to see what you spend on things on average each month, track what you’ve spent daily against what you planned and have left to spend. You can then use the Nudges function for useful hints and observations that will guide you to manage your money better.
2. Use technology to pay yourself first
The concept of paying yourself first simply means investing in your own goals and dreams soon after you get your salary and before it gets whittled away. Automate this by committing a portion of your income towards paying off debt, investing for the long term and building up savings towards a money goal, such as a home deposit. You can start small – investing from as little as R350 per month in a Tax-Free Savings Account via the 22seven app, for instance.
3. If your monthly payments aren’t automatic, consider setting them up
If you have regular fixed monthly payments, such as rent, Netflix or a cellphone contract, consider automating these payments for a set day each month (like the day after payday). This reduces your admin, ensures these bills are paid on time (which is good for your credit record), and frees your time and energy for more meaningful experiences.
4. Save while you spend
If you have not committed to a monthly debit order, it takes discipline to put money into a savings or investment vehicle. But the good news is that some offerings out there do the work for you. Old Mutual’s Money Account, for example, is a transactional account that combines a spending card and high-interest savings account so every time you swipe your card to pay, you automatically invest a set amount (that you choose) into an Old Mutual Money Market Unit Trust.
5. Automate your financial planning
Finally, find yourself an accredited financial adviser to discuss your holistic financial needs – including savings goals, retirement timelines, your valuable assets that need protecting and your personal circumstances so that you are adequately insured. Your adviser can help set up your tailored financial plan and ensure that you’re building towards your own financial security and wellbeing. Best part is that they will also set up an annual financial check-up to make sure you’re on track and adjust your plan, if necessary.