What is one simple financial move you can make to see a big and immediate impact? Batching all of your financial tasks. Why? Because it saves time, money, and stress. How, you might ask?
It Saves Time
Batching your financial tasks saves time in the same way batching other tasks does, and then some. Studies like this one have shown that people spend more time working when they are multitasking and switching between tasks, instead of focusing on just one task at a time. Switching focus also means that people have to reorient themselves when going from one task to the other. Going back and forth increases the frequency of errors, which costs more time to go back and fix them. That is bad for any kind of work, but when you are working on your finances, those errors can be seriously costly. Accidentally reversing two numbers in a sequence or dropping a zero can have huge ramifications.
Instead, batch all of your financial tasks together so they can all be accomplished while you have the tools and programs you need close at hand and ready to go. Also, the best time to look over all your finances and financial goals is while you are in a financial state of mind, so give it a try! I bet you will like it.
It Saves Money
Batching not only your “sit at the computer” type of financial tasks, but also your expenditures, can create significant savings over the long term. Batching all of your buying means putting off purchases, which also means taking the impulse out of an impulse buy.
Personally, I like to keep several standard shopping lists: One for things like groceries and household goods, one for business and office supplies, and a Pinterest board called Upgrades for things I would like to get at some point but don’t really need immediately. This way, I can easily keep track of the things I want to buy without rushing out to buy them the moment I think of them. I have time to do a quick price comparison before I buy, and pinning wish-list items online saves the time (and risk of opportunity shopping) of actually driving to a nearby store. The less frequently I walk into a store, the less often I find things I hadn’t thought I needed, but put in the cart anyway once I saw them.
It Saves Stress
Thinking about money every day is stressful. If you know that you have a designated day on which to tackle all the money things, you can stress less the rest of the month knowing that yes, it is scheduled, and it will get resolved. It’s kind of like making an appointment for the dermatologist to look at that funny little mole. It might still cross your mind from time to time, but you know you made the appointment and worrying in the meantime doesn’t help anything.
Convinced you should batch your financial tasks? You can do it in 10 easy steps. Let’s get started:
Step 1. Choose which account you are going to use to pay all of your personal bills. If you also have a business, choose or open a checking account that you will use to pay all of your biz bills too. I call my personal one Bill Pay and the business account Operating Costs.
Step 2. Add payees for all possible bills to each of those checking accounts.
Step 3. While you are entering the payee information, also swing by the website for each payee and see if you can change the due date of your bills. I choose the fifth and the 20th of the month for paying all of my bills and split my bills roughly evenly between those two dates.
Step 4. Make sure you have enough money in each checking account to cover all regularly recurring monthly bills. Personally, I like to keep a one-month buffer amount just to make sure I never get overdrawn. If you need to transfer some money around to make this happen, go ahead and transfer in this step.
Step 5. Turn on the “auto-pay in full” option for all possible bills.
Step 6. Create a physical and a virtual inbox for all financial papers and emails that come into your world. I keep one right on my desk and every time something financial comes in, I glance at it, so I don’t get any nasty surprises, then pop it in the inbox to deal with on the designated day. Same with financial emails. The only exception to this rule is outlined here in a post I wrote about the two-minute rule. If you are the business owner, you will want to remove all possible barriers to getting paid immediately!
Step 7. Make your shopping lists. By this I mean anything you need to purchase that can possibly wait until the designated day. Instead of running errands to buy things any old day, put them on a list and wait. Running low on stamps? Put them on the list. Printer ink? Can it wait? If so, then it goes on the list. This can also help you track your usage on things like printer ink and paper so you can eventually automate purchase and delivery. A service like the Amazon Subscribe and Save Store can deliver things monthly or bimonthly to your doorstep, saving you that errand-running trip.
Step 8. Put it on the calendar. Schedule your financial days for the same time every month. Remember how in Step 3, I set my bills to be paid on the fifth and the 20th? I also schedule those days in my calendar to verify that all auto-paid bills are properly paid and to check the balances in my accounts. With those current balances fresh in mind, I then tackle the physical and virtual inboxes. This usually involves paying invoices, writing checks, addressing and stamping envelopes, and going through the shopping lists to see what needs to be bought now and what can be bought later or taken off the list altogether. I also set aside the last day of the month to do the expense reports, look over the accounts again to make sure I accomplished all my financial tasks, and tie up all the loose ends going into the new month!
Few things clog up the flow more than money worries. Batching all of your bills and purchases to occur three financial days per month ultimately allows you to have all of the other days in the month free from financial worry and strain. It allows you to focus on the areas where you excel, and gives you more mental energy and space to get into that fabulous state of flow.
Jennifer Turrell is a member of the DailyWorth Connect program. Read more about the program here.