How to Automate Your Finances

The ability to automate your finances is one of the most useful advancements of the last 20+ years. Still, so few take advantage. This is how to automate your finances to live a more peaceful life.

Having our finances automated takes out the most inconsistent thing in our financial lives. US! Throughout the course of the month there are several times in which we are “money-conscious”. Unfortunately, MOST of the time that we are money-conscious is when we are conscious of the fact that we don’t have money. Therefore, we plot and scheme the “what-if” moments and long for our next paycheck. However, when that paycheck comes we go all out and live like Beyonce, just to repeat the process. Automating our finances allows us to make those important decisions while were are thinking rationally.

Here is a great example of how to automate your finances by Ramit Sethi, author of I Will Teach You to Be Rich:



The concept is that as a paycheck comes in, all of our financial obligations are automatically taken care of.

Think of an assembly line. Your paycheck starts at the beginning of the line, working its way from person to person, each taking their share to ensure your financial future (in this case the people are taxes, retirement, savings, credit, mortgage, etc.). The unfortunate part is that everyone gets their piece before you. However, the end product is yours to spend 100% guilt free because your obligations are already paid for.

Pro tip: I try to think of those “financial obligations” like weight lifting. Initially its tough, but eventually you find yourself adding on more weight. Well, with automating finances, once you notice that you can survive with 5% of your income going to retirement you start to wonder how much you can actually start putting away. 

Just like with anything in finances, there is not a one size fits all in automating it. Everyone’s goals differ and so does the way we spend our money. Gather your goals and expenses from our 4 Steps to Creating a Budget article and see how this template works for you.

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