When you see "money" and "hack" in the same sentence, you're likely to run to your bank account to make sure every dollar is still there.
This isn't about identity theft; it's all about how to automate, optimize, and maximize your personal -- and business -- finances, using a few digital tools as I outline in my brand new book Financially Forward.
As a wife, mom, daughter, sister, friend, and executive, my life can get pretty crazy. But technology has saved me countless hours (and headaches) around my money.
Hack 1: Get organized.
For most people, April is when the financial frenzy happens. That's because they're scrambling to account for a year's worth of expenses to file their taxes on time. I start a money to-do calendar in January, so I'm sitting pretty by tax time, and you can too.
Start now by getting organized digitally. First things first: Uncover all your accounts -- and your company's accounts. I want you to have a thorough list of everywhere you have money.
Here are the ones you should have (you might need fewer, but certainly not more): Checking, Savings, Credit Card, Brokerage and Retirement. Audit your accounts to make sure that every single one is the best in its class. If it's not, move it. Close accounts as needed, roll funds into the right spots and slowly phase out extra credit cards (one per year, ideally), depending on the situation.
Finally, set up digital access to all of your remaining accounts. Remember, part of why you picked them is for their A+ digital experience, so take advantage. You can also link them to a Personal Financial Management app, like Mint or others.
Hack 2: Automate these items:
- additional IRA,
- emergency savings fund,
- paying down any debt -- from student loans to mortgages, and
- credit card (as long as you actually read and review your statements)?
It's time to automate your financial life and build a customized algorithm to funnel your dollars to the right spots.
Remember, a financial plan sets out to answer the question: "Where should my next dollar go?" And automation can be used to put those dollars into the buckets that will determine your financial security: Retirement, paying down your credit card debt and an emergency savings fund.
Before you move on to any other financial goals, you must have these three things in order. If you lose your position or your business has a significant financial crisis, I want to make sure you are debt-free and have emergency savings to cushion the blow.
You'll also need to automate the allocation of your funds. All too often, I see people who are contributing to retirement accounts, but who forget (or ignore!) the next step of investing those dollars. Generally speaking, a target date fund, a combination of stocks that takes your retirement age into account to assess risk levels, is relatively easy and something to consider.
This applies salaried workers as much as it does to entrepreneurs and those of us who are self-employed. Just because you don't work for a big company doesn't mean you get a pass on retirement saving and investing. Preparing for your personal financial future is the single most important thing you can do for your business.
Set up sub-accounts for your savings goals -- and set up auto-contributions so that you're making progress on them without even thinking about it.
Now that your money is automatically going into the right buckets on an ongoing basis, automate calendar alerts so that you remember those key moments throughout the year when action is required.
Hack 3: Go cash-free.
I've talked a lot about your wallet. But the very definition of a wallet is evolving every day. When our kids are older, they won't even carry them.
That's fine by me; I'm really not a fan of cash. Today's digital landscape is vast and making the bulk of your transactions in cash does not make sense, for all sorts of reasons.
But credit cards are like digital money 1.0. So, what's next? Your smartphone. From Apple Pay to Venmo, the technology we use to move money around is improving all the time.
With tools like Apple Pay, Google Pay, and Samsung Pay (at least one of which comes pre-installed on most phones), we can now use our smartphones to move money in countless directions. Once you log in and get through your layers of password protection (ideally pin, fingerprint, and even facial recognition), secure access to your money is right at your fingertips.
By taking advantage of digital tools for managing your money, you'll save yourself (and your company) valuable time.
All Investments carry risk including potential loss of principal and no investment strategy can guarantee a profit or protect against loss.
Northwestern Mutual is the marketing name for The Northwestern Mutual Life Insurance Company (NM), Milwaukee, WI and its subsidiaries.