How we automate our financial lives

32 thoughts on “How we automate our financial lives”

  1. Awesome sauce. I just commented on Luxe Strategist how automation is the key to early retirement. Ye olde “set and forget.” We still automate our 401K up to the employer match. And max contribute to the HSA. Though lately we’re blowing through large chunks of the HSA to laser our eye balls. Jesus.

  2. Automating the 401k is the easiest and most proven way to build your retirement savings. I did that when I was working full time and it worked really well. Now that I’m self employed, I’m doing it manually every month. The income isn’t steady so automation doesn’t work yet.

  3. I have my pay deposited into a Vanguard money market fund, and auto deposit my monthly budget to my checking. That way, I decide how much is available to spend and automatically save the rest. Also, my effective pay day matches my billing cycle. I do not need to pay attention to what day my company pays me. If I need more money in a given month, I can easily grab it, but that extra step alerts me I am spending too much. It does take an extra day for my pay to clear due to quirky mutual fund rules.

    Auto 401k is assumed for me. I can also set up auto IRA from the Vanguard fund.

    I have not automated my bills much. I have clumped most of them to be due within 1 week of each other, so I can sit down once and pay them all. Most vendors will let you choose a due date if you ask, at least as a range. It works except for the semiannual payments. I think I will revisit the idea of automating.

  4. You know, I’ve never gotten around to auto-paying my credit card bills. I think it’s because I like to log in frequently anyway and make sure I know where the money is going, so it’s never been an issue. Auto pay on insurance and utilities has been nice, though. One side benefit is that it makes it easier to keep my frugal brain from obsessing over the cost. It just gets paid and I don’t stress about it.

    1. I think if you have the requisite discipline, then bill automation isn’t necessary. If you can trust yourself to always do that, then you have a leg up!

  5. 401k’s, IRA’s, savings, and other investments all automated. I also automate all the bills that I can. For some bills I actually auto pay them with my credit card to get rewards, then auto pay the credit card on it’s due date.

  6. Interesting Steve — We took almost the exact opposite path. We specifically choose less automation in our life. Although, back when I was working we definitely automated 401k investments. But bills and investing in our taxable accounts? No automation. On purpose.

    It’s forced us to become far more disciplined, and far more aware of what’s going on with our finances. For some people, that might be a good thing.

    1. I guess if you have the discipline to stay on top of that, less automation is an option. Though, I would say that just because your bills are automated doesn’t necessarily mean you can’t stay on top of your bills like you are now. The only difference is you don’t need to hit that “Pay” button. 🙂

  7. I got the feeling from my payroll representative in my former company that I was basically the only person in the company that maxed out their 401k.

    The same goes for me at my company… pretty crazy that people aren’t putting away what they need to be for retirement (early or not!).

    I automate the 401(k) and HSA through payroll – that’s the easy one! I then automate moving money to our Roth accounts and our Ally savings. I automate the mortgages for our house and the rentals, but then I also automate moving some money from the business account for that over to our consumer account (payday!).

    I don’t automatically pay my credit cards, but I do it a little differently. I just pay all my credit cards every two weeks on payday. Regardless of the due date, this helps me make sure they stay clean.

    It takes some work to get everything setup, but like you said, once it’s automated, the magic just happens!

    — Jim

    1. Yup, the two-week approach is a good one – it can also work well for your mortgage, which would work out to making an extra principle-only payment each year. Magic! 🙂

  8. I’ve been automated for a while, especially on the investing side via 401k, P2P, and other investments.

    The one place I don’t automate is paying my credit card bills. I still track our spending very closely and reconcile our credit card bills every month. Partly for security, and partly as a reminder to keep a close eye on our spending to keep it from getting out of control.

    1. You can still automate AND keep close track of your spending, but I totally understand. For some people with the discipline to make it happen, paying bills manually is a better approach.

  9. I love automation too! It’s such a relief not having to worry about missing a bill. We have everything automated at the FAF household (i.e. 401(k), internet, electricity). We’ve had to pay late fees before, and it was not fun at all.

    The only two frequent payments that are not automated are our credit card payment and water (we have to go into the system and click Pay >_<).

    1. Yup, I love the convenience of automation. Paying the bills isn’t something that I want to spend a lot of time doing. I’d rather use that time…creating! 🙂

  10. I like having a “plan C” savings automation. Emergency funds and saving for big purchases (savings a and b) are important, but having a plan c one has really helped me.

    There are a few ways I do this. First, I set up an auto-save to where $1.00 gets transferred to savings every time I swipe my debit card. 2nd, I use my Ally Bank savings account and set up small $30 transfers to happen every two weeks. Then whenever I save money on a purchase, I deposit the savings into the Ally account. Plus, their saving account interest rate (1.25% vs. traditional banks 0.01%) is hard to beat!

    1. I just applied for an Ally cash-back credit card that gives a 10% bonus if you deposit the cash into an Ally online savings. Another way to automatically contribute to savings without thinking about it.

  11. We do the same thing. Retirement savings, car replacement, college fund, wedding fund (I’ve paid for a couple of these out of cash flow and it is brutal – trying to get ahead of the next one), taxable account and every bill that can be paid automatically, all happen without having to think about it. It really is the only way to go.

  12. In addition to 401k and other things we have an automated savings account withdrawal. It pushes us to meet our budget by cutting it to the budget point but also gives leeway to reverse it if things go over before actually dumping to an investment.

  13. It’s so simple that it’s hard to believe everyone isn’t doing it (the automated 401k payments that is). But as we all know, they’re not. So I’m not very surprised that your company rep told you that you were the only one doing it. Sad…

  14. Automating is the way to go. Make it easy. Love the quotes as well. Each person has their own method to their madness and sharing is the best way to help others find the system that works best for them.

    Take care,


  15. Automation makes a lot of things easier especially for retirement accounts. Since my 401K contribution is already deducted on my paycheck, I don’t have to worry about it and just watch that account keep building. With my IRA account, I set it up to contribute every month automatically. Also do the same for contributing to my son’s college fund(529).
    I only thing we pay manually is our credit card bills since we want to track our spendings very closely.

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