Maintaining Your Plan

In exploring personal finance automation, we’ve learned that handling many financial tasks with little day-to-day oversight can be relatively easy to set up and manage. Yet no amount of automation can take your role in making sure your plan continues to work for you.

Automation is great for scheduling transfers and bill payments using rules you set in advance, but your plan should be continuously updated based on changes in your financial outlook and goals. Only you, for example, can determine the balance between reducing debt and saving for the future when your income increases.

And while it’s easy to set up automated transfers to assist with saving and debt reduction priorities, there is still a crucial question - what exactly are your financial goals? Changes in your life situation can also bring changes to your automation plan. For example, consider someone who is currently renting and decides to work towards home ownership. In that case, it may make sense for them to reduce transfers to retirement savings and redirect the money to a savings account for a down payment. That’s just one of countless examples that could include anything related to financial planning - from investment allocation to starting a business.

Checking Your Progress

The key to successfully leveraging financial automation is finding the right balance between technology and personal involvement. Regularly reviewing financial statements is essential to stay on top of your finances and catch any discrepancies that automation might overlook.

Alerts and calendar reminders bridge the efficiency of automation and the necessity of personal oversight. They’re the nudge we need to reassess our financial health periodically. Consider revising your plan at predefined intervals. Examples may include:

• Monthly Check-ins - Review account statements, credit card bills, and automated transactions. Are the bills being paid on time? Are the savings transfers aligning with your budget? This routine can quickly catch any issues before they become a problem.

• Quarterly Reviews - Review budget, debt reduction, and savings goals. Is your monthly budget on track, or are adjustments needed? Are you making progress toward any debt reduction or savings goals? Should any of your transfers be adjusted?

• Annual Deep Dive - Reassess your financial goals, review your credit reports, and ensure that you’re maximizing any employer benefits. This annual review ensures that you’re not just on autopilot but are heading in the right direction.

During each review, it can be helpful to ask yourself if changes to your financial life are reflected in your plan. Everyone’s financial situation is subject to change, so any automated transactions need to reflect current circumstances - not the circumstances of a year or two ago. 

The Takeaway

When it comes to personal finance, setting up an automation plan is the first step. Regular reviews work to ensure that your financial autopilot is always aligned with your current situation and changing goals. 

And remember, if you’re unsure about your goals or whether you’re on track for a secure future, reach out to a qualified financial advisor for personalized guidance.