Automating Your Finances


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How to Turn Your Finances into a Robot

At the end of the day, we don’t sit down and say, “Gee, I wish I had more to do.” It’s quite the opposite. It seems kind of counterintuitive that we’d have to work hard to keep our lives simple, but such is the world in which we live. Some people have found ways to simplify by unplugging — getting rid of cable, turning off their phones, deleting their Facebook accounts, etc. But in our day-to-day, Johnny and I use technology more than ever because we’ve found ways for it to simplify our lives — and especially, our finances.

In the past few years, we’ve started automating our finances, so much so that we’re thinking of changing the name of our blog to Our Freaking Robot. Or maybe just I, Robot. So today we wanted to share how we automate and hear any of your tips, too.

Rent

If your rent is like ours, it’s due on the first of every month, and no later than the fifth. Rather than reminding ourselves to write a check and mail it off to our landlord twelve times a year, we have our bank do it for us, using bill pay. We don’t have to worry about late payments, and our landlord can predict when our payment is going to arrive since it comes on the same exact day every month. The money comes out of our checking account, so we make sure to keep our account balance ready for that withdrawal.

Utilities

Utilities can be trickier because they vary from month to month, making it impossible to set up an automatic bill pay through our bank. Boooo. Some utility companies have automatic payments through their own site, which we always sign up for first thing. Our gas company, for instance, sends a bill to my email, but then they automatically take the balance out of our bank account on the same day each month.

On the flip side, our electric company doesn’t offer such a service because they haven’t yet seen the light (I’ll blame the horrible pun on today being Monday). So on top of an e-bill, we also have them send us a paper bill in the mail. We’re all about saving the trees, but the paper bill is a great, tangible reminder that we have a monthly bill due. And it’s much less likely to be glanced over than an e-bill. The same day that bill comes in the mail, we pay it off (using a bill payment through our bank… no clunky check writing necessary). And then we recycle it by letting Sally go to town and do her best Impressionist artwork on it.

Checking to Savings Transfer

Any money we make goes to our checking account, and any money we spend leaves from our checking account. But to keep that checking account in check (another terrible Monday pun) and to keep our savings growing, we automatically transfer a minimal amount to savings at the end of the month. We like to make sure our savings is always growing, so the automatic transfer gives us one less thing to do. And if we want to transfer more, we can always do that when we have the time.

Credit Cards

Our biggest rule of thumb when it comes to using credit cards is paying them off in full every month. So if it’s an option to do so, we have the credit cards automatically pay themselves off in full on the same day each month. We still receive credit card statements through our email so we can keep track of how much money we’ve put on a specific card, but the dirty work is done by the plastics themselves.

So that’s how we automate. Automating our bills is much different from automating our budget — which we don’t do. For that, we manually enter in every expense because it keeps us accountable and more aware of our spending. You can read more about that here.

Do you automate? Care to share any other financial automating tricks we may have missed?

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11 Comments

  • Reply Kirsten August 11, 2014 at 7:58 am

    I’m not sure how I’ve missed this bank paying boat, but I have. My sister mentioned it to me when she was visiting after our baby came and I was like “that’s an option?”. So now, with this reminder, I’m going to go check into that. I hate, hate, hate paying bills!!!

  • Reply Melanie August 11, 2014 at 9:39 am

    I think Im too much of a control freak to automate much. I do allow my renter’s insurance to be automatically withdrawn, but I think its because the company was going to charge me something ridiculous like $5 per paper bill! But my insurance to rent is $8/month so it’s kind of easy to keep that in my account, haha.

    I’ve had this goal of saving $500/month into savings. I did really well January through May and once June hit, all of a sudden my money went missing! Haha. So just recently I set up an automatic withdrawal once a month of $500 to savings…. I’m hoping now when I do my budget, I just consider that a permanent, non=negotiable cost like my rent or retirement withdrawal. Hoping to trick myself! 😉
    Many articles I’ve read have said automating savings is an excellent way to save, so I’m hoping it will work for me.

  • Reply Little House August 11, 2014 at 10:22 am

    I pay most of my bills online (except for rent), but don’t automate them…well, there are a few that are automated now that I think about it. I think I like paying them the “old-fashioned” way because I like to sit down and record every payment in Quickbooks. It doesn’t take me very long, may half-an-hour, and I feel more in control of my finances this way. Secretly, I actually LIKE paying bills. I’m weird, I know.

  • Reply Kassandra August 11, 2014 at 11:04 am

    We pay the majority of our bills except rent on our credit card but we make sure to pay our statements in full before the due date. There is one utility bill that charges a fee if paid by cc so we set up an auto-withdraw from our chequing account through them. It is important to still verify the bills every month as I caught a big error on our first gas bill which they corrected after I had called them.

  • Reply [email protected] August 11, 2014 at 11:11 am

    I loooove automating payments. As long as you have money in the bank, it saves so much time!

  • Reply Rob August 11, 2014 at 1:09 pm

    Well Joanna, we operate pretty much like you guys do with automatic monthly bill payments. All our utilities are handled in this way (phone, water, hydro, gas). We don’t rent but rather own our mortgage-free house so all we have automated here are our equal monthly tax and insurance payments. Our monthly car insurance payment is handled the same way. We do however intentionally do not automate our credit card payments as I prefer to manually control the timing of these monthly payments myself (so as to not to get caught short for the variable funds required to cover the full amounts owing). Due to the “float” on how long I can defer these payments after the credit card billing date (usually 15 to 20 days), I can better control our cash flow situation, as I anticipate when income streams get regularly deposited into our accounts.

  • Reply [email protected] August 11, 2014 at 1:24 pm

    I have everything automated except for the rent, but now that you mention it, why not? Bill pay will save me a stamp!

  • Reply Newlyweds on a Budget August 11, 2014 at 5:06 pm

    I receive e-bills but I don’t automate anything. I like to know how much cash I have available at any given time, and it would drive me nuts if money just disappeared from our checking due to an automated payment. I pay bills online but I like to decide when it’s paid.

  • Reply Anne August 11, 2014 at 5:49 pm

    I pay bills online, and used autopay for utilities at the apartment (M pays those at the house now), and still do so for term insurance and HOA since they’re constant amounts. Credit cards on the other hand I look over the statements to make sure I recognize everything (old habit from before Mint) before paying them like clockwork on the second Monday of every month (today! look at that timing!). I could automate the mortgage payment but I like scheduling it and deciding then if I want to put extra towards the principal.

  • Reply Michelle August 14, 2014 at 6:03 pm

    I have a hard time putting my bills on automatic bill pay. If I was a salaried employee where I knew what each check would be, I would easily do this. But because I don’t know what I will be making or bringing home for the month, it is difficult to rely on money that may not be there for the month.

  • Reply Slinky August 26, 2014 at 5:41 pm

    I automate as fully as possible with one restriction – the only person authorized to withdraw money from my accounts is me. I’ll allow automatic charges to my credit card where I can dispute it at least, but no automatic withdrawals from my checking. Anything I can automate on my end is fine. Regular bills are all on automatic bill pay. Stuff like credit cards with variable payments also have auto payments set up for typical amounts. When I get the statement, I just go in and change the amount right away (5 minutes tops) and then it goes out a few days before it’s due automatically. Besides retaining complete control of my money, this also lets me see and change everything coming out of my checking in one place.

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