Many of us start businesses or branch out into freelancing so that we can live more flexible lifestyles and make money on our own terms. As part of this effort, it’s important to consider your financial goals. Are your efforts paying off in a way that allows you to have the money you need?
How Automating Helps You Reach Your Financial Goals
Automated savings are a big part of helping you reach your financial goals. The biggest reason automation helps is the fact that you don’t have to think about moving your money around. When you have to take that money and consciously put it aside, it’s easy to short-change yourself. Automation keeps things moving without your conscious effort.
Figure out how much money you need to set aside on a regular basis and automate. You can automate by:
- Having money automatically taken from your paycheck. If you have a regular job on top of your side business or freelancing efforts, see if you can have money automatically taken from your paycheck and put into a retirement account or other savings account.
- Move your money automatically from one account to another. Most accounts allow you to set up automatic transfers. Check to see if you can set up regular transfers. I use them for my investment accounts, as well as for other financial goals. I don’t have a regular paycheck, so it helps me to automate these transfers.
Being able to have the money moved into your accounts (you can even set up sub-accounts to help you manage your financial goals) automatically prevents you from skimping out and ensures that it moves quickly and easily.
Make Sure to Plan Your Automation and Financial Goals
You do need to make sure that you are careful to plan your automation, especially if you are on a variable income. Once you quit your “real” job to run a business and/or freelance full-time, you will need to figure out how to manage your cash flow differently. This means looking ahead to make sure you have the money in your account to move around. I usually make sure that all of my priorities are accounted for as soon as I receive money from clients. It’s a good way to stay ahead of the game and plan for my financial goals.
It also makes sense to have backup systems in place. I have a line of credit connected to my checking account. If clients are late, it means that money is automatically transferred so I don’t miss the transfers associated with my money goals. Then, when the money comes in, I can pay off the line of credit before interest is charged (or if it is, it’s a very small amount).
Running a business or side business, or doing freelance work, can all be great ways to earn extra money and help you reach more of your financial goals. Use automation as a way to make sure your efforts are paying you.