Easy Guidelines for Automating Finances

Automating finances is one of the smartest money moves you can make. Here are a few easy ways to get started.

Automating finances is one of the smartest money moves you can make.

On top of improving your financial health, automating finances can reduce your stress levels.

You won’t have to worry about meeting your savings goals because you’ve already done the math and set up the necessary transfers to make it happen. No more worrying about when bills are due; they’ll get paid automatically.

Before you can reap the benefits of automation, you’ll need to take a couple of preparatory steps.

Read: 8 Tools to Automate Your Finances in the New Year 

Establish Your Financial Goals

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If you want to transfer a set amount of money to savings, it’s helpful to know what you’re saving for, how much you’ll need in total and how much you can afford to stash away every month.

Do you want to go away on vacation every summer? Max out your employer-sponsored retirement plan? Build a six-month emergency fund?

Whatever your goals are, you need to clearly define them. Establish how much money you’ll need first. If you’re saving up a six-month emergency fund, multiply your monthly expenses by six, for example.

Then, establish any hard deadlines. If you’re going to go on vacation in July, it would be nice to have your travel fund together by June.

Finally, you’re going to have to budget. You may want to buy that $1,200 plane ticket so you can traverse the world, but if you can’t afford your bills plus the savings required to afford that ticket, you’re going to have to reevaluate your plans.

Once you’ve firmed up all of your financial goals and budgeted for them accordingly, you’ll be ready to get the automation process started.

Need help setting up your budget? We’ve got you covered.

Setting Up an Automatic Transfer

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Setting up an automatic transfer is a piece of cake.

You’ll log into your bank account and look for the “Transfer” option. You should be given the option to make a one-time transfer or an automatic transfer.

The automatic transfer menu should give you the ability to set up the frequency of your deposits, including the option to make your transfer happen on specific dates.

Let’s say you wanted to save $300/month in your Roth IRA, but you haven’t been doing it because saving is hard. You could log into your account, head over to the transfers and set up a $150 transfer twice per month aligning with your pay days.

Automation for Freelancers

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When you freelance, you’re never 100% sure when you’re going to get your next paycheck.

If your clients aren’t abusing IRS rules, you shouldn’t be working at the same location doing the same work on a regular basis with a guarantee of future work opportunities.

That means your pay is irregular, and irregular pay is really difficult to deal with. You can go about automating your finances in a few ways, then. After you have set money aside for taxes, you can throw the rest of your pay into a savings account for the next month. When the first of the month rolls around, you should already have your expenses fully funded.

If you feel like you have enough cash flow to reliably meet your expenses every month, set up an automatic transfer from savings into checking at the beginning of each month. This transfer ensures you have enough money to meet your bills and other expenses throughout the month.

You should also set up an automatic transfer from your main savings account into a separate savings account which you’ve dedicated to your emergency fund, vacation, next car, etc.

Automating Savings vs Automating Your Bills


Automating the savings process is a tiny bit different than automating bill payments.

Depending on your cash flow situation, both are good ideas—as long as you’re sure you’ll always have the money in your account to avoid an overdraft fee.

Instead of going to the “Transfer” section of your financial institution’s website, you’ll go to the “Pay Bills” section. There, you’ll be able to set up one-time transactions or regularly occurring transactions.

If your bill amount varies from month to month, you may want to initiate automatic payments not with your bank, but with the company that’s billing you.

For example, your electric bill likely isn’t exactly the same every month unless you’re on a budget plan. To make sure the entire bill is paid every month, you can initiate automatic payments from the electric company’s website.

When you do this, you can draw the money from your bank account or a credit card. If you put all your bills on a credit card, you won’t have to worry about keeping the right amount of money in your checking account at any given moment in time.

Instead, you’ll just have to worry about one due date: your credit card’s due date. Make sure you pay it off in full every month, though.

Simplifying your finances is great, but not if you get caught paying outrageous interest rates month over month.

Automating Your Retirement Savings

Retirement Automation

How you go about automating your retirement savings will depend on which type of tax-advantaged account you have.

If you have a 401(k), 403(b) or defined benefit/pension plan through your employer, automatic withdrawals are something you’ll want to set up with Human Resources. All of these accounts feature upfront tax benefits.

Essentially, your contributions help your Adjusted Gross Income (AGI) go down on your taxes because these contributions won’t count towards your income. They’re not taxed.

You will, however, have to pay taxes upon withdrawal. Your employer should be taking care of all that for you so when you go to file your taxes every year, the most complicated thing you should have to do concerning these accounts is look at the prefilled information on your W-2.

However, if you have an account which is taxed upfront but not upon withdrawal—like a Roth IRA—you can handle automatic transfers independently. Simply set up an automatic transfer with your bank, or have your advisor or roboadvisor do this for you.

Apps that Help You Automate

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Automating isn’t a terribly difficult process logistically.

However, behaviorally you might view it as a chore, putting it off until your cash flow looks better or you simply find the motivation to get everything set up.

If you find yourself in this situation, know that there are apps out there that can help you get better organized.


Chime Bank

Chime is an online-only bank with plentiful features like low fees and early pay with direct deposit. Of particular interest, though, are its savings features.

You can easily set up an automatic transfer to distribute 10% of your paycheck to savings every time it comes in. You can also opt into a round-up program, which rounds up all your purchases to the nearest dollar. If you buy a pack of gum that costs $2.79, for example, $0.21 would be automatically transferred to your savings account.



Qapital now offers banking services, too, but its pièce de résistance is its if/then rules. You could set up rules like, “If I spend money on Etsy, I’ll send an equal amount to savings.”

Because that extra money has to come from somewhere, you’ll have to pull it from one of your budgeting categories like entertainment or streaming subscriptions. You could also set up a rule that’s as simple as, “If I get paid, then Qapital should automatically transfer 15% of that deposit into my savings account.”



While there are apps that help you automate investing via a round-up rule similar to Chime Bank’s, the money that is set aside in these accounts is not held within a retirement account. These are taxable accounts, and you will have to pay interest on any gains.

Many of these apps have started adding retirements accounts to their services, and you’re able to set up automatic deposits for them. However, this isn’t any different from other roboadvisors. Be sure to research fees and portfolio options to find the best roboadvisor for you.

The Advantages of Automating Your Finances

Automating requires a little bit of planning and organization upfront, but after you get through the initial process, managing your finances will become so much easier and less stressful.

Knowing your bills are paid on time and that you’re working towards your savings goals without having to stress out about it every month can bring you and your money so much peace.

Brynne Conroy

Brynne Conroy

Motivation for women in business & on the homefront. Smart money management for success & true wealth. Author of The Feminist Financial Handbook.

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