Full disclosure: I’m a bit of a control freak.
I don’t think I’m overbearing or bossy, but I definitely get stressed when I’m affected by something outside of my control.
In school, group projects would literally keep me up at night.
The idea of half my grade being in someone else’s hands gave me stomach pains.
I share this because it helps to underscore the idea that automating things doesn’t come naturally to me.
As much as I love technology, I’m not sure I totally trust it.
But I have to admit, automation is one of the best things I did to take control of our personal finances.
The primary benefit of automating our finances is that it’s forced us to prioritize our goals over our immediate desires.
It’s easy to say “I’ll save whatever’s left at the end of the month,” but when we do that, how often do we actually have anything left?
By forcing ourselves to save first, we limit our spending, not our savings, and create positive long-term habits.
We’re preventing lifestyle creep and largely automating our path to financial freedom.
Admittedly, this takes some getting used to, so ease yourself in.
But if you’re interested in having more control over your money, here are 5 easy steps to automate your finances.
1 – Setup Automatic Deposits
The first step to automate your finances is the one that gets you your money faster – direct deposit.
Not only does it save you time not having to drive to the bank or find an ATM, but it can also save you money.
Most banks will waive monthly checking account fees if you have direct deposit set up.
It’s also more reliable than waiting for a paper check in the mail or having to pick one up at HR.
With direct deposit, your money automatically shows up in your account when it’s supposed to, regardless of the mail carrier’s or HR’s schedule.
If you have an irregular income or an unpredictable income, direct deposit may not be an option.
In that case, make sure you find a bank that doesn’t charge you any account fees. Most online banks will offer free checking, regardless of direct deposit.
2 – Automate Your Retirement Contributions
I know it’s hard to picture your future self, but the fact is we’re all living longer. If you don’t want to work forever, you need to start saving for retirement.
Ideally, you should be trying to reach the maximum contribution limit each year, but that’s more of a goal than a starting point.
If you’re not contributing much right now, start small.
You can begin by setting up automatic contributions of just 1% to your retirement account and gradually increase your monthly contributions over time.
But I’d also suggest checking into your employer’s retirement plans and matching policy.
Many employer-sponsored retirement plans will match your investment contributions up to a certain percentage.
This is literally free money so if your employer plan offers it, definitely consider contributing up to that level.
For example, if your company matches up to 5%, start by setting your contributions to 5%.
It may seem like you can’t possibly afford to save 5% of your salary without taking a massive hit to your take-home pay, but since your contributions come out pre-tax, it may not be as bad as you think.
If you’re worried, run your numbers through this calculator at Bankrate to get an idea of how your paycheck will be affected.
As you get your finances under control, definitely consider raising this amount until you’re able to hit your max contribution for the year.
Start by just increasing it by 1% a month. Increasing your investment in small increments will help you gradually adjust to living on less.
3 – Automate Your Savings And Pay Yourself First
You could probably consider your retirement saving as paying yourself first, but that’s your future self. That money isn’t usually available to you until you reach a certain age.
To make sure you’re building savings you can access now, you need to pay your current self too.
The best way to do this is by setting up an automatic transfer into your savings account or an investment account.
I use Betterment for most of our investment accounts and follow the dollar-cost averaging principle (basically making regular investment purchases over time to avoid or compensate for market fluctuations).
I love that I can set a financial goal in
For each of our goals, we automatically transfer a set amount from each paycheck. The entire process is simplified and tailored to help us reach our money goals.
While Betterment is great for long-term investing, for your emergency fund and more immediate goals, or to avoid market volatility in general, you’d be better off using a high yield savings account.
In either case, automating the process will ensure your dollars are put to work making more money for you and helping you reach your financial goal.
M1 Finance is another tool you can use for automatic investing. If you’d prefer to have more control over what fund options make up your investment plan, look into M1.
Invest smarter with M1 Finance. Get free investing, high yield checking, low rate borrowing, automation, and optimization. For free!
How to Save Money When You Don’t Think You Can
If you feel like you simply don’t have the money to save, try out an app like Digit.
They use a fancy algorithm that studies your spending patterns and generates automatic withdrawals from your checking account into your
By the end of a couple of months, you’ll have money saved you didn’t think you could spare.
4 – Setup Autopay for Your Regular Bills
Setting up automatic bill pay was one of my biggest hold-ups.
I felt like I would completely lose control and awareness of our spending and discretionary expenses by not tracking and paying everything by hand, directly out of my checking account.
Boy was I wrong.
Automating our bill payments has been a huge relief.
I still make sure to budget for the bills, but not having to worry about which ones need to be paid and when has made life so much easier.
Here are a few tips when it comes to automating your bills.
Tip #1 – You Still Need a Budget or Spending Plan
First, make sure you’re still budgeting appropriately.
Just because you have automatic bill payment setup, doesn’t mean you can ignore the amount you’re paying.
In order to avoid an overdraft fee, you’ll need to make sure you’ve budgeted the funds to cover those expenses.
Good money management is important if you want to automate your bill payments.
Creating a financial plan and setting up sinking funds and spending goals is the best way to ensure you’ll have the money when you need it.
Make sure you take a look over your monthly bill statement to make sure there are no errors or odd billing mistakes, too.
Also, don’t forget to budget for non-monthly bills, like your car registration and insurance.
And consider building up a savings buffer for variable expenses (like your utility bills), unexpected expenses, and non-recurring expenses.
Tip #2 – Take Advantage of Credit Cards
Assuming you have a credit card with no debt that you pay in full each month, try to use it to pay your other bills on time.
If you don’t trust yourself with credit cards or have outstanding credit card debt, skip this tip and move on.
But if you don’t have any issues with credit, this can be a great way to avoid late payments and make sure everything is paid on time.
Plus, plenty of credit cards will still offer you reward points for these types of transactions.
For those who usually time their bills to their paychecks, using a credit card can also help avoid potential overdraft fees.
Again, please please please only do this if you can (and are) paying off this card in full.
Tip #3 – Automate Any Bill That Saves You Money
Some billers will actually give you a discount for setting up autopay.
When I had student debt, my old student loan payments were reduced by a quarter percentage and our current cell phone provider gives us a $10 discount per month when we use autopay from our bank account.
It’s not necessarily a lot, but every extra dollar adds up.
Check with your billers and see if you can pay less by automating things.
5 – Automatically Pay Your Credit Card Balances
This has been by far the most difficult automation for me.
We pay for all our typical monthly expenses and living expenses on our credit card accounts, so we have a pretty hefty credit card payment each month.
But because we also make our purchases across several cards to take advantage of different rewards programs, it can get pretty complicated to keep track of due dates.
I finally bit the bullet and automated our credit card payments this past year and it has been amazing.
The trick with automating your credit card payments is to make sure you’ll have the funds available. If your account balance is always trending low, get that sorted first.
I had to learn to trust my budget (and live according to it) before I was comfortable with this.
If you don’t have a budget or don’t trust yourself to pay things in full, I’d still suggest setting up an automatic payment for at least the monthly minimum amount due.
This will ensure you don’t get hit with any late fees or penalties. That alone can save you hundreds of dollars a year and give you a little peace of mind.
Plus, there’s nothing preventing you from making additional payments as needed.
Even though I’ve automated the regular payments for my cards, I still manually go in each week and pay my balances down.
I mainly do it to keep my credit score high, but it’s also a way to maintain more awareness of our everyday spending and financial decisions.
If you know you can pay your credit cards but the timing is a bit tricky, use my monthly bill calendar to map out when everything comes due in relation to your pay.
Then, if you need to, give the credit card company a call and see if they’ll move your billing date.
The vast majority of creditors have no problem doing that.
Time to Go Automate Your Finances
It’s not always easy to trust the banks or lenders with your data. Or to trust yourself to stay on budget.
But I truly believe automating our finances has been one of the best money decisions I’ve ever made and has been a huge part of our financial success.
I know it can be a big hurdle to automate your finances, but having your money on autopilot is a freeing feeling.
It seems somewhat counter-intuitive, but financial automation forced us to take more control of our money and really assess our spending habits.
We had to make sure there was enough cash to cover everything being automated so we became more aware of our spending and category balances.
Automation has helped us take control of our spending, trust our budget, pay off our debt, build our savings, and maybe most importantly, remove the stress around keeping track of bills and due dates.
Overall, automation has drastically improved our entire financial life.
If you want to automate your finances, start with the ways above and let me know how it goes for you!