How Do You Automate Your Finances? – The Worth Project

by admin

One of the most difficult things I used to struggle with was staying on top of my money. I was a little disorganized and I always seemed to have better things to do than sit down to pay bills and make sure things were going where they should. When a good friend mentioned that she set up an automated system for her money, I was intrigued. How do you automate your finances and not continually hide from them (like I was doing)?

After a little (ok, a lot) of googling, I came across David Bach’s book, The Automatic Millionaire. While I didn’t agree with his stance on the latte, his approach to automating your savings as a way to ditch the need for willpower was intriguing. I decided to start testing his approach in my life for two reasons:

  1. I wanted to save more money, and
  2. just as importantly, I wanted to save more time.

After years of doing this, I’ve refined my own system.

Ready to make your money go where you want it to, without thinking about it? Here’s what you need to know about automating your finances.

What does “automate your finances mean?”

Automating your finances means that your money is going exactly where you want it to, without you having to actually do anything. You take your spending plan and automate everything that you can: set up automatic withdrawals to savings, automatic bill payments, and more.

But automating your finances doesn’t mean that you set it up once and forget about it. You’re creating a system and just like with any other system you want to be sure that what you’ve set up is working like it should.

Is automating your finances a good idea?

While some people instantly love the idea of automating their finances, others question the approach. Isn’t it a better idea to always be in tune with where your money is going? What if there’s a mistake or fraud? If you’re not constantly checking in, won’t you miss it?

I can completely understand this concern, but one thing people miss is that just because your money is on auto, it doesn’t mean you never check-in with it. By having it on auto, you know that your bills will be paid even if you forget to pay them. But that doesn’t mean that you never check-in with your money.

The steps to automate your finances

Follow these steps to get started with your financial automation. It may take an hour (or more) to set up, but the time savings you get in the future will be well worth it.

Step 1: Figure out where you want your money to go (ie: create a spending plan)

Do you have a spending plan or budget? If not, stop right here and create your spending plan. When you automate your money you make sure that every month you automatically put it where it needs to go. It’s hard to know where it should go without a plan. So start that spending plan and come back to move onto step 2.

Step 2: Pay yourself first

Have you ever gotten to the end of the month and wondered why you weren’t able to save more? Where did all of that money go? This is why a widely shared rule of personal finance is to pay yourself first. That means that before you pay any other bills, you put money into savings. Even better, let’s automate paying yourself first.

Let’s say that you get paid on the 1st of the month. According to your spending plan, you want to set aside $750 for retirement, $500 toward saving for a down payment on a house, and $350 to a vacation fund. You’d set up automatic transfers to happen for each of these, just as soon as you get your paycheck. If your employer does automatic contributions to a 401(k) account, set that up with them. For the other two transfers, you’d set up an automatic withdrawal to a savings account so it happens without you even thinking about it.

Step 3: Simplify your bills

This step was one of the best things that I did to simplify my money. I made a list of all the bills that I pay each month and scheduled them to be due around the same time, right after being paid.


It’s annoying to forget about a cell phone bill only to have it come due three days before payday. I wanted to get out of the cycle of always putting these expenses on a credit card. If they’re paid at the same time and right after a paycheck, I always have the money to pay them and I never forget about a rogue bill that’s due on the 27th of the month.

Once I have everything due at the same time, I schedule automatic payments so I never miss a bill. Because is there anything more annoying than late fees?

Step 4: Draw yourself a money map

Once you have things set up — you have your money automatically going into savings and your bills automatically being paid — it’s helpful to have a map drawn of where exactly it’s all going. That way, if you need to change something, it’s easy to figure out what to change.

Jordan and I have a money map that shows how money flows in from our paychecks and flows to different accounts and bills. See the main image at the top for our money map on automating our finances.

Step 5: Check-in monthly

Just because you have things on auto-pilot doesn’t mean that you can sit back and never look at your money again. But it does save you a lot of time each month. Jordan and I will often do a quick check on our accounts every week, but when we sit down to look at it monthly, it takes just 15 minutes.

Bottom line on automating your money:

Automating your finances makes staying on top of things quick and easy. Plus, it’s a great way to make sure that your money is going where it should be, without needing to rely on willpower. It may take a little time to set up, but you’ll make it up and more in the future.

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