How to set up automatic money transfers

Today, it’s time to go back into your accounts and automate all transfers To view this email as a web page, [click here]() How to set up automatic money transfers This week, I’m sharing my Automated Money System with you. With a couple hours of work — just follow the easy, step-by-step instructions in the newsletter this week — you'll have your finances completely automated. Yesterday, you linked your accounts. Today, it’s time to go back into your accounts and automate all transfers and payments. This is really simple: It is just a matter of working with each individual account’s website to make sure your payment or transfer is set up for the amount you want and on the date you want. One thing you want to pay attention to is picking the right dates for your transfers. This is key, but people often overlook it. If you set automatic transfers at weird times every month, it will inevitably necessitate more work. For example, if your credit card is due on the first of the month but you don’t get paid until the fifteenth, how does that work? If you don’t synchronize all your bills, you’ll have to pay things at different times and that will require you to reconcile accounts. Which you won’t do. The easiest way to avoid this is to get all your bills on the same schedule. To accomplish this, gather all your bills together, call the companies, and ask them to switch your billing dates. Most of these will only take five minutes each to do. There may be a couple of months of odd billing as your accounts adjust, but it will smooth itself out after that. If you’re paid on the first of the month, I suggest switching all your bills to arrive on or around that time too. Call and say this: “Hi, I’m currently being billed on the seventeenth of each month, and I’d like to change that to the first of the month. Do I need to do anything besides ask right here on the phone?” (Of course, depending on your situation, you can request any billing date that will be easy for you.) Now that you’ve got everything coming at the beginning of the month, it’s time to actually go in and set up your transfers. Here’s how to arrange your Automated Money System, assuming you get paid on the first of the month. 2nd of the monthPart of your paycheck is automatically sent to your 401(k). The remainder (your “take-home pay”) is direct-deposited into your checking account. Even though you’re paid on the first, the money may not show up in your account until the 2nd, so be sure to account for that. Remember, you’re treating your checking account like your email inbox — first, everything goes there, then it’s filtered away to the appropriate place. Note: The first time you set this up, leave a buffer amount of money — I recommend $500 — in your checking account just in case a transfer doesn’t go right. You can “cash out” that buffer after a couple of months. And don’t worry: If something does go wrong, use the negotiation tips in [Chapter 2 of my book]() to get fees waived. 5th of the monthAutomatic transfer to your savings account. Log in to your savings account and set up an automatic transfer from your checking account to your savings account on the 5th of every month. Waiting until the fifth of the month gives you some leeway. If, for some reason, your paycheck doesn’t show up on the first of the month, you’ll have four days to correct things or cancel that month’s automatic transfer. Don’t just set up the transfer. Remember to set the amount too. (To calculate the amount, use the percentage of your monthly income that you established for savings in your plan — typically 5–10%.) But if you can’t afford that much right now, don’t worry! Just set up an automatic transfer for $5 to prove to yourself that it works. The amount isn’t important: $5 won’t be missed, but once you see how it’s all working together, it’s much easier to add to that amount. 5th of the monthAutomatic transfer to your Roth IRA. To set this up, log in to your investment account and create an automatic transfer from your checking account to your investment account. (Note that there are government-set limits on contributions to 401(k)s and Roth IRAs. A quick Google search will tell you what the current limits are for your situation.) Refer to your [Conscious Spending Plan]() to calculate the amount of the transfer. Ideally, it should be about 10% of your take-home pay, minus the amount you send to your 401(k). 7th of the monthAuto-pay for any monthly bills you have. Log in to any regular payments you have, like cable, utilities, car payments, or student loans, and set up automatic payments to occur on the seventh of each month. I prefer to pay my bills using my credit card because I earn points, I get automatic consumer protection, and I can easily track my spending using tools like You Need a Budget or Mint. But if your merchant doesn’t accept credit cards, they should let you pay the bill directly from your checking account, so set up an automatic payment from there if need be. 7th of the monthAutomatic transfer to pay off your credit card. Log in to your credit card account and instruct it to draw money from your checking account and pay the credit card bill on the seventh of every month — in full. Because your bill arrived on the first of the month, you’ll never incur late fees using this system. If you have credit card debt and you can’t pay the bill in full, don’t worry. You can still set up an automatic payment; just make it for the monthly minimum or any other amount of your choice. To summarize, here is the timing to set up for your Automated Money System: [Chart] By the way, while you’re logged in to your credit card account, also set up an email notification (this is typically under “Notifications” or “Bills”) to send you a monthly link to your bill, so you can review it before the money is automatically transferred out of your checking account. This is helpful in case your bill unexpectedly exceeds the amount available in your checking account — that way you can adjust the amount you pay that month. DON’T WAIT ON THIS. Clear some time on your calendar today to set up these transfers (and set up your accounts, if you didn’t do that yesterday). Seriously — add an appointment to your calendar for later today. Remember, once you've automated your finances, you can relax knowing you'll never miss another bill, you'll hit your savings and investing goals automatically, and you’ll be able to spend your money guilt-free. Or as I like to call it, start living life outside the spreadsheet. [Meme] [Signature] WHAT TO DO NEXT SHARE: Know someone who would benefit from automating their money? They can sign up for my FREE automation mini-course [here](). [SIGN UP]() How did you feel about today’s email? [insta]() [Twitter]() [twitter]() [youtube]() [Linkedin]() [podcast]() This email was sent to {EMAIL}. If you no longer wish to receive these emails you may [unsubscribe]( at any time. 548 Market St #89946 San Francisco, CA 94104-5401