How to Automate Your Finances [with Infographic] (2024)

Before we get into the details of automating your finances, let’s explain what we mean by this term.

Automation is setting up your accounts to distribute your paycheck on a monthly or weekly basis, so you don’t have to do anything but monitor them.

Some examples of automation you may already be doing (just not in a streamlined way) include:

• Auto bill payment
• Automatic deposits into accounts
• Netflix auto-withdrawal
• Autopay of monthly mortgage or rent

Automation allows you to streamline all of your accounts from savings to retirement and move money where it needs to go without having to think about it every month.

Basically, when you automate your finances you distribute your paycheck – so you can save, plan for your future, and have control over your funds.

Why Automate My Finances?

Have you ever been driving through traffic and all of sudden had that twist in your gut remembering that the insurance bill was coming out today? And you weren’t sure if you had the funds in the account to cover it?

Automation will help alleviate the stress of making sure you have money in your accounts to cover your bills.

Or maybe you are one of those people who promise to save “whatever is leftover” at the end of the month.

Do you notice how there is rarely anything left over? Or maybe you do not have an emergency fund or savings account at all. Yikes!

When you pay yourself first and make it automatic, you don’t even have to think about it. If you put off saving until “everything else” is taken care of it will be hard to reach your goals.

Repeat after me: Set it and forget it.

Step 1: Get a Budget in Place

Automation REQUIRES having a budget in place. It can be a monthly, bi-weekly, or weekly budget – basically a budget for every paycheck.

Once a budget is in place, it should include these items (at a minimum):

• Bills
• Savings
• Retirement
• Groceries
• Transportation
• Mortgage/Rent
• Debt payoff

You need to know what money is coming in and where it is going before you can start to make things automatic.

Step 2: Create a Visual Flow Chart and Open New Accounts

When getting started with automating your finances, it's best to start with a flowchart. Grab a piece of paper or pull up excel and create a chart that tracks where your money needs to go. The infographic below provides an example of a flowchart.

It may be easier to set up a second checking account to automate a set amount. In this example, $400 moved into an account called “Bills” on the 4th of every month. “Bills” were then deducted from this account on the 8th of the month.

The best part is that when you set up a second checking account, you get a separate account number and you can label it whatever you please. A terrific example of organizing based on your needs.

You will also want to reconsider your traditional savings account with your bank. Call or live chat with them to see what your current interest rate is on your savings account. You might be surprised at how low the rates are, and you’ll likely want to consider a high-yield savings account instead.

Synchrony Bank and CIT Bank have high-yield savings accounts you can set up online. This is where you might want to put your emergency savings. You can also get a debit card, so you have immediate access to those funds if needed.

Step 3: The Secret to Automating Your Finances Successfully

Once you have a budget in place and have created a flowchart, the big secret to automation is picking one maybe two dates to have everything taken out of your account. It's a bit of a hassle to set-up initially, but it is SO worth it! It’s the secret to automation success.

When you first start, it may take a month or two to switch over all the dates. But then you know that all of your savings will be transferred in on the 4th and bills will be coming out on the 8th. Then you can rest easy and monitor the accounts.

One hint: make sure to check your available payment dates for student loans and your mortgage first. These tend to be the most challenging to change. Then you can pick your savings in transfer and bill payment dates based on these loans.

If you pay your bills on a credit card, connect the card to your new checking account for bills and set the date! Credit cards typically let you pick any payment date you would like.

PayPal can be the trick to setting up payments for bills including cell phones, Netflix or cable/internet – as these bills may only have one set payment date that you can’t change. Those companies offer a payment option through PayPal. This allows you to connect your PayPal to your new “bills” checking account. Then you can schedule the payment to come out on the date you prefer.

Try not to get too hung up on the dates as you start to automate your finances. If companies only offer a window of dates that will work out fine. Automate in a way that works for you and takes the stress away.

Take it one step at a time. Make a list of bills today. And call your mortgage company and your cable service tomorrow. Just take action.

Step 4: Relax and Watch Your Money Grow

Have that cup of coffee and sit back. Then download an app like Empower where you can connect all of your accounts.

Automating your finances will give you peace of mind, but make sure you monitor your accounts for the first few months to make sure you were not charged twice, and verify the switching to new dates went smoothly. The last thing you want is an overdraft charge!

Smile. Watch your savings grow and pat yourself on the back for getting closer to meeting your financial goals.

Article written by:

Bethany, a graphic design and photography teacher and the co-creator of His and Her FI. She along with her partner Charles share their adventures and stumbles on their journey to FI.

Have a money question you’d like answered? Submit it here.