Published in: Banks | Nov. 6, 2019
By: Lyle Daly
Spending more time on your finances may not be worth the hassle.
As important as money is, most households spend very little time managing it. When we researched the time Americans spend on personal finance, we found that financial management in a typical household took less than two minutes per day.
That sounds bad, especially after considering households average two hours and 50 minutes watching TV every day. The obvious implication is that people spend far too little time on their finances and far too much time on trivial matters.
Although this can be true in certain cases, spending so little time on your finances doesn't necessarily mean you're doing something wrong. It could even mean that you're doing something right.
The best approach to take with your finances is to set them up so that you don't need to devote all kinds of time to managing them. There's nothing wrong with spending an hour or less per month on this; in fact, that is a good goal to have.
You simply don't need to spend hours on money management to optimize your financial situation. Many things can be automated, including bill payments, retirement account contributions, and transfers to savings accounts. By automating as much as possible, your finances will be a well-oiled machine that doesn't require much effort on your part.
Once you've done this, you can take a hands-off approach, only spending time on your finances when it's something you can't automate or there's an important decision to make. That leaves you with more free time to spend on other pursuits.
Here's a quick breakdown of how you can automate the most common financial tasks:
You'll probably have a couple of bills, such as your rent or mortgage, that you can't pay with your credit card. Many bank accounts include a bill pay feature that you can use to automate these.
The one issue to watch out for is not having enough funds available on one of your payment methods. You don't want to max out your credit card, and you definitely don't want to go overdrawn on your bank account. Make sure your credit card has a credit limit that is much higher than the amount you'll be charging to it and that you leave more than enough in your checking account to cover all your bills.
You'll still need to do some things for yourself. It's a good idea to review your accounts at least once per month for any billing errors or fraud. And if you have any big financial decisions on your plate, then you should take as much time as you need to make the right move.
There are plenty of financial tasks that are worth your time. It pays off to research ways to save more money, retirement plans that will help you reduce your taxes, valuable credit cards, and other topics that could improve your financial situation.
Financial management isn't one of these tasks, though. You can get your bills paid and your money transferred wherever you want without doing it yourself. And when you do, it frees up hours to spend with the family, to exercise, to watch TV, or whatever else you'd rather do instead of moving money around.
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