Financial automation: how to save time and money with smart tools

Tidying up your finances can sometimes feel like a chore. E-bills pile up in your inbox, savings plans are forgotten and you only hear about investment opportunities when the train has already left the station. Sound familiar?

Fortunately, there are solutions that let you forget about tedious spreadsheets and paperwork. Financial automation can help make your finances simple and straightforward, so you can focus on what really matters.

If you value your time and are looking for ways to manage your finances smarter, you've come to the right place. In this article, we'll show you how automation can help you save time, grow savings and simplify your financial life.

What is financial automation?

Financial automation is the automation of various tasks related to your finances, i.e. having a computer do them for you. This can cover everything from paying monthly bills to making investments. Automation is like having your own personal financial assistant working for you around the clock, without you having to lift a finger.

But what exactly can be automated? Here are some examples:

Payment of bills: Forget about late bills and late payments! With standing orders, you can set up automatic payments for rent, utility bills and other regular bills.
Saving: Dreaming of travelling or buying a new car? Automatic transfers help you set aside a fixed amount each month without having to think about it.
Investing: Investing can seem complicated, but automatic investment plans make it a breeze. Choose the level of risk that suits you and let the system invest for you.
Drawing up a budget: Budgeting can be tedious, but there are a number of apps to help you keep track of your spending and keep it under control.

Financial automation doesn't mean you lose control of your money. On the contrary, it gives you more control because you no longer have to worry about day-to-day financial tasks. Instead, you can focus on bigger financial targets and enjoy your free time.

How can automation help you make more money?

Investing is one of the best ways to grow your money over time. But the world of investing can seem complicated and time-consuming. That's where automation comes in.

Automatic investment plans

Automatic investment plans, such as. Bondora Go & Grow, allow you to make regular investments without having to constantly make transactions yourself. You can choose the amount you want to invest and the investment interval (e.g. monthly or weekly), and the system does the rest. It's a great option for beginner investors who want to start investing without a lot of prior knowledge.

Budgeting software

Budgeting software, such as YNAB or Monefy, can help you keep track of your income and expenses and set realistic financial goals. These apps automatically categorise your spending into different categories, giving you a good overview of where your money is going. This, in turn, helps you make informed decisions about your spending and find ways to save.

The magic of compound interest

One of the biggest advantages of automatic investment plans is that they help you take advantage of compound interest. Compound interest means that the interest you earn starts earning interest, which in turn earns interest, and so on. The longer you invest, the more powerful the compound interest effect becomes. Automatic investments ensure that you invest consistently, which is key for compound interest to work.

How can automation save time?

Time is our most valuable asset and financial automation is a great way to save this precious resource. If you're tired of paying monthly bills or preparing a budget, automation could be just the solution you're looking for.

E-invoicing and standing orders

E-invoicing is a convenient way to receive and pay invoices. No more waiting for paper invoices in the post or worrying about losing them. E-invoices arrive directly to your email address or to your online bank, where you can pay them in just a few clicks.

Standing orders are an even more convenient solution. If you have regular payments, such as rent or utility bills, you can set up a standing order to make these payments for you automatically. This saves you both time and hassle, and ensures your bills are paid on time.

Other tasks that can be automated

Paying invoices and budgeting are not the only tasks that can be automated. Here are some additional examples:

Payment of insurance premiums: If you have more than one insurance policy, paying the premiums can be a nuisance. Set up a standing order and forget about premium due dates.
Increasing savings: With automatic transfers, you can transfer a fixed amount to your savings account each month without having to think about it.
Rebalancing the investment portfolio: When investing in different asset classes, portfolio rebalancing is important to keep your risk level under control. Some investment platforms offer an automatic portfolio rebalancing service.

Financial automation risks and how to avoid them

As with everything in life, financial automation has its risks that should be taken into account. But with the right precautions, these risks can be successfully mitigated.

Risk of overspending

One potential risk is that automation could make spending too easy. If you don't monitor your spending closely, you may find that you spend more than you planned. That's why it's important to regularly review your budget and transactions to make sure that all spending is necessary and reasonable.

Security risks

Another important aspect is security. Make sure you only use trusted and secure platforms and apps to manage your financial data. Never share your passwords or PINs with anyone else and be wary of phishing attempts.

Common financial automation mistakes

The beauty of financial automation lies in its simplicity, but it can lead to some pitfalls. For example, you might forget all about your spending and discover at the end of the month that you've overspent. The solution? Don't lose control! Keep track of your spending regularly and adjust your automatic transfers if necessary.

The second mistake is relying too much on "autopilot". The financial market is volatile and automated systems may not always take all the nuances into account. It is therefore important to stay on top of your investments and make adjustments where necessary.

How to avoid the risks?

Track your spending: Don't let automation lull you to sleep. Regularly monitor your account statement and budget to keep track of your spending.
Use strong passwords: Create strong and unique passwords for all your financial accounts and don't use the same password for multiple accounts.
Be wary of suspicious links and emails: Never click on dubious links or open emails from unknown senders, as these could be phishing attempts.
Update your software: Make sure your devices and apps always have the latest security updates installed.
Use two-factor authentication: If possible, use two-factor authentication on your financial accounts to add security.

Financial automation can be a powerful tool, but as with any tool, it is important to use it wisely. By following these simple tips, you can reap the benefits of automation without putting your money or data at risk.

How to get started with financial automation?

Getting started with financial automation is not difficult. Here are some simple steps to get you started:

Set up e-invoices: Most banks and service providers in Estonia allow you to set up e-invoicing. Log in to your online bank or service provider's website and look for the appropriate option.
Open an automatic investment plan: If you want to start investing but don't know where to start, an automatic investment plan can be a great option. Choose the platform that suits you (e.g. Bondora Go & Grow) and set a monthly or weekly investment amount.
Use the budgeting app: Budgeting apps like YNAB or Monefy help you keep track of your income and expenses and set financial goals. Download the app that's right for you and start tracking your spending.
Set up standing orders: If you have regular payments, such as rent or utility bills, set up standing orders so that these payments are paid automatically.

Getting started with financial automation does not require major changes or special knowledge. It's just a few small steps that will help you better manage your finances and save valuable time.

Specific recommendations for beginners

Don't do everything at once: Start small and gradually add new automated tasks.
Choose the ones that are right for you tools: There are many different applications and platforms available on the market. Choose the ones that meet your needs and preferences.
Don't be afraid to ask for help: If you have any questions, don't hesitate to contact your bank or financial adviser.

The psychological aspect and future trends

Financial automation has an impact on our relationship with money deeply. It can free us from the daily worries of money and give us confidence that our financial commitments will be met. In turn, this can reduce stress and allow us to focus on long-term goals.

In the future, we can expect even more personalised and intelligent financial solutions. Artificial intelligence can help us make better financial decisions by providing personalised recommendations and predicting future trends. While this sounds exciting, it is important to remember that automation is just a tool. The ultimate responsibility for our finances will always remain with us.