Use Technology to Automate Your Finances

Financial success is not an easy feat. It requires discipline, focus, and long-term goal setting. Keeping those long-term goals in mind all the time requires a lot of effort and self-control.

Financial success is not an easy feat. It requires discipline, focus, and long-term goal setting. Keeping those long-term goals in mind all the time requires a lot of effort and self-control. By creating automation flows and processes, you can reduce temptation and achieve easy financial discipline.

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Here are some ways to help automate your finances:

1. Start with a “Reverse Budget”

Figure out how much you need to save FIRST, then work your way back. You can figure this out by classifying your goals as short-term, intermediate, and long-term.

Short-Term Goal Examples:

  • Yearly Roth IRA contributions
  • Contribution to an “Emergency Fund” (until maxed out)
  • Paying off high interest debts
  • Vacations

Intermediate Term Goal Examples:

  • Down payments for a car or house
  • College tuition payments

Long-term Goal Examples:

  • Retirement
  • Investments

After you’ve categorized your goals, you’ll need to figure out the monthly savings you want to achieve.

2. Set up your bank accounts:

Setting up your bank accounts will allow for an easy “siphoning” of cash flow so you can reduce temptation and increase discipline. You want to make sure your bank accounts have mobile apps and a good user interface so you can set up automatic transfers. You’ll want a popular checking account and several low-transaction savings accounts.

Checking Account:

Have a main, popular checking account (BoA or Chase, ideally) which you’ll treat like “Penn Station,” allowing all your finances to flow in and out. By having a popular one, you’ll know that you have local branches just incase you need to get cash. Always keep a cash cushion (25-50% of your monthly expenses) in here.

Savings Accounts:

Set up low-transaction savings accounts for your goals. Ally (an online bank account) offers competitive savings rates and multiple savings accounts per individual. You can create a “Roth IRA” savings account, vacation fund, and so on.

3. Pay yourself first!

Paying yourself first will get rid of the temptation for unneeded spending. On your pay day, you should set up automatic transfers to your goal savings accounts. You can create all types of automatic transfers; weekly, bi-weekly or whatever suits your needs better.

4. Automate bill pay accounts (NOT credit cards).

Your monthly expenses should be automatic to reduce thinking and avoid late payment fees. Electric / mortgage / utilities should all have automatic payments set up so you don’t miss one.

5. Manage your credit cards.

Credit card management is tough but can be very profitable if managed well. If you pay off your statement each month, you’ll be able to obtain rewards on purchases you’re already buying anyway. Some have a 5% “cash back” calendar that changes categories every quarter; others are for restaurants / travel / groceries. Do research ahead of time and find a credit card that has rewards that mesh well with your lifestyle.

A little tip: Use a label-maker to list the rewards categories for that quarter on your individual credit cards. When the categories change, you can peel the sticker and add a new one.

“Catch-All” credit card:

A “catch all” credit card should at least have 2% cash back (Citi double cash has this benefit). This will be used if none of the other categories meet the requirements, you would pay using this credit card.

Category-specific credit cards:

Amazon offers a 5% cash back at, discover IT and Chase Freedom have 5% calendars, UBER offers a 4% cash back at restaurants (through Barclays), and there are many different travel cards. Just be careful of annual fees unless the cost / benefit outweighs it.

6. Use credit card apps to your advantage.

You can automate your credit cards so long as you remember the goal is to ALWAYS pay off the statement. Download all the corresponding apps with your credit card and link your main checking so you can make a quick payment within seconds from anywhere. You should aim to keep the credit card balance under a certain amount. Usually less than $300-$500 at any given time. It’s much easier to pay $3000 over 30 days than at one time with that large statement balance.

Apps to help you:

  • Mint (owned by intuit) is a great aggregator of all your accounts and alerts you of any fees or if your credit score dramatically drops.
  • Personal Capital is another aggregator with a focus on retirement and long-term investment goals.
  • Credit Karma is a way to monitor your credit score and factors that affect it the most. It also provides solutions to help you fix your credit.