How To Automate Your Finances – Easy Guide

James Beattie By James Beattie 7 Min Read

Automating your finances is one of the best ways to ensure you are paying all of your bills on time, saving for your goals and investing for your future without having to think about it. If you have to do everything manually each month, chances are you will miss bills or skip investing in favor of something else.

By automating your finances and sticking to a budget, you will automatically reach your financial goals over time. In this article, I’m going to show you how you can get set up.

How To Automate Your Finances

In the modern age, especially in the UK, most bills and savings can be automated which makes things much easier. Most bills these days are already automated on a monthly or quarterly basis and savings and investing apps make it easy to invest your money automatically each month.

Automating Your Bills

Automating Your Bills

The first step to automating your finances is automating your bills. Many people end up paying interest or late fees because they simply forgot to make a payment. This should never be the case.

Most bills these days can be paid on a monthly or quarterly basis especially your main recurring bills like electricity, mortgage, rent, council tax and more. A lot of the time you will get a discount for setting up a direct debit as well, saving you slightly more money.

If you still pay any of these bills manually, you should contact your provider and ask them to change it to a direct debit.

Personally, I like to pay most of my bills on a monthly basis where possible, as it means I spread the cost evenly across each month. If you pay your electric bill quarterly, for example, it can be much harder to budget for that larger lump sum.

I also like to line up most of my bills early in the month so they come out right after my pay lands. By doing this I know how much money I have to budget for the rest of the month rather than being surprised by a large bill in the middle of the month.

You may also be interested in our Payday Guide To Financial Success.

Automating Your Savings & Investments

While most bills are automatically set up with direct debits, your savings and investments probably are not.

By automating these to come out at the start of the month, it forces you to save and invest then live on the remaining amount you have left. I used to try and save whatever “I had left” at the end of the month but that ultimately was nothing. Whenever I switched to saving and investing first, I found a way to comfortably live on the remaining money in my account.

You may have heard the saying that “work will expand to fill the time allotted for its completion”. I find this is also true with money. We will live on what we have available to us. Lifestyle will inflate or deflate based on how much money we have.

By forcing yourself to have less money in your main current account by directing money to savings and investments early in the month, you learn to live on the remaining left.

Of course, this has to be within reason but you should be able to start stacking away at least £100 per month for your future.

Similar to the bills, I have these payments scheduled to come out in the first 5 days of the month. That way, everything remaining is left for spending on whatever I want.

Most modern banking and investing apps will allow you to set up a direct debit which automatically takes a set amount of money from your current account each month.

HL Automated Investing
Hargreaves Lansdown Automated Investing

It’s important to remember to actually invest your money once it hits your investment account. Most accounts will allow you to automatically direct it to a fund each month if you choose to do so.

For savings, I use sinking funds for each of my goals. This is set up by using pots in Revolut. These are essentially sub-accounts under your main account, labeled for each of your main goals.

Once it’s set up, you don’t have to think about it again. Your finances are automated and your net worth will automatically increase month over month with a system like this.

Visualising Automating Your Money

The chart below shows you how automating your money works. By utilising this system, your investments and savings will automatically grow over time. As you make more money, you can contribute more to the categories you want to. However, I would recommend avoiding lifestyle inflation and instead direct a large portion of that raise towards your investments until you reach your goals.

How To Automate Your Finances

Wrapping Up

Hopefully, this article has helped you to start automating your finances. By automating your bills and investments it takes the thought out of managing your money. Simply, spend an hour setting up these direct debits once and watch your net worth grow over time.

Net Worth Tracking Sheet For Google Sheets

Easily track your net worth in google sheets with these easy to use template. Add all of your banks accounts, stock accounts, properties and liabilities. Track how your net worth trends month over month so you can keep on top of your finances.

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I'm passionate about personal finance and making money. Currently trying to FIRE solely by building online assets. Grew my stock portfolio to £86,000 by 26.
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