How And Why To Automate Your Finances (2024)

Automating your finances can be a great way to handle paying bills, planning for retirement and saving money. With well-established practices like direct deposit, automation can save you plenty of time and stress.

With the right tips, you can automate your personal finances and discover how automation can put some time back into your day.

Automated Finances At A Glance

It may be hard to believe in 2023, but there was a time when having a paycheck deposited required an in-person visit to the bank. Fortunately, that’s one of many areas where automation has changed the game. Here’s a quick look at financial tasks that people now often automate.

Bill payments: Many creditors allow automatic payments for mortgage loans, car loans, student loans and many other financial obligations. This is also common for paying utility companies and subscription services, such as cable and internet providers.

Direct deposit: One of the original ways to automate finances, direct deposit saves many of us a trip to the bank to deposit paychecks.

Retirement, brokerage and savings accounts: Many financial institutions allow customers to automatically transfer a set amount of money at regular intervals to different accounts. You can choose where to move your money, but it’s common for people to move funds from checking accounts to retirement, brokerage or savings accounts. It’s also a popular way to transfer money into an emergency fund.

What Automating Your Finances Means

Direct deposit is a perfect example of automating a repetitive financial task. Rather than a twice-monthly trip to a bank, your paycheck goes directly into the bank accounts of your choice.

Essentially, any movement of money from one account to another without your direct intervention is a way to automate your finances. Financial institutions often make automatic transfers easy, as do subscription services such as Netflix. Your employer may need to help you set up automatic contributions to a retirement plan, though.

Why Automate Your Finances

Automating your finances can eliminate a lot of stress from your life. Instead of running around on the weekends trying to finish paying the bills, you can relax knowing that all of your bills have been paid.

You’ll also improve your personal finances without any interference. It can be a constant battle to remember to separate your savings or make a deposit into your investment account.

Thanks to automation, you can set up a system that helps you reach financial goals. Over time, thoughtful automation of your finances can even potentially give you more money in the future, if you set aside money to invest every month.

What Financial Tasks To Put On Autopilot

In addition to the ones already described, other money tasks can be put on autopilot. It’s common practice these days to set up autopay for loan payments, retirement savings, student loans, car payments, credit card bills and many other financial obligations.

How To Make Automatic Savings Work For You

It’s not easy to stick to a monthly savings goal if you have to manually move money from account to account.

Before you can determine how much you should save each month, take a close look at your monthly budget. If you don’t have one yet, you can build a budget that works for you. Once you have a handle on your budget, then you can more easily automate your finances.

How To Automate Savings Account Transfers

With some help from your financial institution, you should be able to set up an automatic transfer from your checking account to your savings account. You can also establish an account as an emergency fund.

Once you’re set up, the bank will automatically move a set amount of money into your savings account. You can automate accounts to allow for a smooth transfer without any assistance from you. Not only will you save time, but you’ll also ensure that your deposits go into the appropriate account before you can spend the money.

Of course, you can always dip into your savings account if a true emergency arises. But this automation will force you to think about your savings goals and ensure that it’s truly an emergency.

Automatic Payments Can Streamline Your Bills

In most cases, you’ll be able to set up automatic payments for your bills. Think about your mortgage, credit cards, utilities, subscriptions and other financial obligations. Find out if you can set up automatic payments for each of your monthly bills. Automation can also help you always pay by the due date, which in turn will help you avoid late fees and potential damage to your credit score. Some providers may even award you for setting up auto pay by providing a small discount to your bill.

If your landlord isn’t a professional property manager, it may be difficult to set up automatic payments for your rent. However, your landlord may be willing to find an automated solution. After all, they don’t want to worry about whether they’ll receive your rent check on time every month.

It may take some time to set up these automatic payments, but it’s worth the upfront effort to permanently remove these tasks from your monthly to-do list.

Automatic Investments Can Build Wealth

After you’ve automated your savings and your bill payments, think about what’s next. Since you no longer have to worry about whether your bills will be paid on time, start building for a better financial future.

A thoughtful investment strategy can help, whether you contribute to an individual retirement account (IRA), mutual fund or another type of brokerage. If you set up automated investing, then you’re thoughtfully investing in a regular rhythm for potentially years to come.

Automated investing can take some of the urge to “time the market” out of your hands. Since we’re all human, we sometimes base investments on emotion. However, you’re more likely to build a prosperous investment portfolio through automatic deposits into your investment accounts.

First, automate the money going into your employer-sponsored retirement accounts. If you have access to a 401(k) or 403(b), then at least contribute enough to receive your employer match.

Typically, your employer will deduct this money directly from your paycheck. After you’ve squared away the automation of your employer-sponsored account, you can set up automatic contributions to your taxable investment accounts.

FAQs: Automatic Investments, Bill Paying And Savings

Here are a few questions that people often ask about automating their brokerage accounts, bill payments and savings deposits.

How do I fully automate my finances?

You may need your employer’s help with such automations as direct deposit and a 401(k). But for things like cable, streaming and internet services, you can typically arrange automatic payment directly with the provider. Your financial institution should be able to help with other automations, such as automatic transfers from your checking account to your savings account.

Should I automate my bills?

Automating bill payments can save time and effort. If you want the convenience of automatic payments but want complete visibility, some solutions allow you to see when your bill is paid and where your money is going.

How do I automate money to a separate account?

This depends on what you’re trying to accomplish. Transfers from a paycheck to a 401(k) account might require your employer’s help, while you can arrange transfers from checking to a brokerage with your financial institution’s assistance.

Why should I automate my savings?

Automatic transfers from checking to savings accounts remove a task from your to-do list and guarantee that you always set some money aside for the future. Be sure to consider your weekly or monthly budget when determining how much to transfer.

The Bottom Line: Automating Your Finances Can Build Wealth

It’s easier than ever to move money from one account to another. Automated transfers into a brokerage, a retirement account or a savings account build on the convenience of direct deposit and set you up for great financial health.

If you want complete visibility into automatic transfers to and from your accounts, alongside an automated budget, sign up for the Rocket Money℠ app today.