Published On: Sun, Jul 15th, 2018

Using digital tools to automate your financial plan

I’m envious of people that have a long memory. My granny can recount names, addresses, birthdays, anniversaries, outfits people wore and where, and the exact value of her investments from her previous statements.

I, on the other hand, keep notes and set reminders on my phone so that I don’t forget important dates, tasks and numbers. Despite years of doing Sudoku and taking French classes, I still don’t have the sharpest recall.

Set it and forget it. Automating your budget and savings for things like groceries is one of the best ways to stay on track financially, writes Lesley-Anne Scorgie.
Set it and forget it. Automating your budget and savings for things like groceries is one of the best ways to stay on track financially, writes Lesley-Anne Scorgie.  (iStock)

So, when it comes to my financial plan, I trust technology to make it happen — otherwise, I’ll forget what I need to do that day, week, month or year for my plan.

A financial plan is based on growing your net worth and there are only two ways to do that: build your assets and reduce your liabilities. Here’s how to automate it all:

Grow assets through pre-authorized deposits

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These nifty little innovations allow you to automate your contributions to your investment accounts such as your RRSP, TFSA, RESPs (for kids) or pension program. You can also authorize these towards your high interest savings account. Try RateHub.ca to compare which accounts offer the top interest rates.

Reduce liabilities through pre-authorized payments

PAPs allow you to make regular automated payments towards your debts like your mortgage, line of credit or consumer loan. Personally, I use PAPS to pay off my mortgages.

A good trick to ensure you never forget to pay off your credit card, hopefully in full, is to set up a PAP on the day that your statement is due to be paid. For regular bills like utilities, use autopay.

Budgeting techs

No amount of digitization will resolve overspending. But, by putting every dollar to work every month, you should reduce waste. Apps like Mint.com, YNAB, Receipts or your bank’s budgeting app will help bring awareness to your spending so that you can make changes. The best way to use these technologies is to have them notify you about your spending — when you’re close to your budget for groceries or coffees it should give you a nudge to slow it down.

Track your progress. If your net worth is growing, your plan is working. If it’s not, you’ve got a bad plan.

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Net worth tracking tools

You can do this on your own via a Google sheet, or let a service like Wealthica take over. The idea is to choose a tool that you can use to track your progress over time — and not just in a single-day snapshot. If you use a tracking service like Wealthica, just be prepared that it might try to sell you something through one of its affiliate partners.

If this is your first time tracking your net worth, use the one-time calculator at GetSmarterAboutMoney.ca.

Technology can outsmart our financial forgetfulness. When you find a system that works you’ll save time and hopefully stay on track with your goals.

Lesley-Anne Scorgie is a personal finance author and founder of MeVest.ca

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Using digital tools to automate your financial plan