Financial Automation

⚠️ DISCLAIMER: I am not a financial advisor. This is not financial advice. These are notes on a system. Do your own research.

Why Automation Works

Willpower is finite. Every financial decision you make manually is an opportunity to make the wrong choice.

Automation removes the decision entirely:

You can’t forget — It happens automatically
You can’t talk yourself out of it — Decision was made once
You can’t spend what you don’t see — Money moves before you miss it

The best financial plan is the one you actually follow. Automation makes following it effortless.

The Automation Hierarchy

Bills — Never pay late fees again
Savings — Pay yourself first (automatically)
Retirement — 401(k) and IRA contributions
Investments — Regular contributions to brokerage
Debt payoff — Extra payments to target debt

Setting Up Bill Automation

Automatic Bill Pay

Bill Type	Automation Method
Fixed bills (rent, subscriptions)	Auto-pay full amount
Variable bills (utilities, credit cards)	Auto-pay minimum OR full balance
One-time bills	Calendar reminders

Bill Pay Timing

List all recurring bills and due dates
Pick a paycheck to cover each bill
Set auto-pay for 2-3 days after paycheck hits
Add buffer in checking for variable bills

Example: Two-Paycheck System

If paid on 1st and 15th:

Paycheck	Bills Due After
1st	Rent (1st), Insurance (5th), Utilities (10th)
15th	Credit cards (20th), Subscriptions (25th)

Auto-pay each bill 1-2 days after its due date gets funded.

Savings Automation

Pay Yourself First

The classic advice: save before you spend.

Manual version: Promise yourself to save what’s left at month end. Reality: Nothing is left.

Automated version: Transfer savings immediately when paid. Reality: It happens every time.

Setting It Up

Direct Deposit Split

Many employers let you split your paycheck. Send a percentage directly to savings—it never hits your checking.

Best option: You literally never see the money.

Automatic Transfer

Set up recurring transfers from checking to savings on payday.

Good option: Money moves automatically, but you see it briefly.

Round-Up Apps

Apps that round purchases and save the difference.

Supplemental option: Better than nothing, but small amounts.

How Much to Automate

Goal	Automated Amount
Emergency fund building	10-20% of income
Emergency fund maintenance	Enough to replenish after use
Other savings goals	Whatever you’ve budgeted

Retirement Automation

401(k) — Already Automated

If you have a 401(k), it’s already automated via payroll deduction. Your job is to:

Enroll if not auto-enrolled
Increase contribution to at least get full employer match
Set auto-escalation (increase 1% annually until maxed)
Choose target-date fund if unsure about investments

IRA — Requires Setup

IRAs aren’t through payroll, so you must automate manually:

Open IRA at Vanguard, Fidelity, or Schwab
Link bank account
Set automatic contribution — Monthly or per-paycheck
Set automatic investment — Into target-date or index fund

IRA Automation Example

Annual limit (2024): $7,000

Monthly automation: $583/month Per-paycheck (biweekly): $269/paycheck

Set it up once, max your IRA every year without thinking.

Investment Automation

Dollar-Cost Averaging

Automated investing means buying consistently regardless of market conditions. This is dollar-cost averaging:

Buy when market is up → Get fewer shares
Buy when market is down → Get more shares
Result: Average cost over time, no timing needed

Brokerage Automation

Platform	Automation Features
Vanguard	Automatic investment into funds
Fidelity	Automatic investment, fractional shares
Schwab	Automatic investment, Intelligent Portfolios
M1 Finance	Built for automation, “Pies”
Betterment/Wealthfront	Fully automated robo-advisors

Debt Payoff Automation

Minimum Payments

Always automate minimums. Missing payments destroys credit and adds fees.

Extra Payments

Beyond minimums, automate extra payments to your target debt:

Identify target — Highest interest (avalanche) or lowest balance (snowball)
Calculate extra — What can you afford beyond all minimums?
Set auto-payment — Schedule extra payment same day as minimum
Update when paid — Redirect to next target debt

See Debt Strategies for method details.

The Master Automation System

Here’s how a fully automated system flows:

Complete Automation Flow

Payday hits your checking account:

Time	Action	Destination
Day 0	Paycheck arrives	Checking
Day 0	401(k) deducted	Already happened pre-deposit
Day 1	Auto-transfer	Emergency savings
Day 1	Auto-transfer	IRA
Day 1	Auto-transfer	Taxable brokerage
Day 1	Auto-pay	Credit card (full balance)
Days 1-5	Auto-pay	Other bills as due
End of month	Whatever’s left	Spending money

You don’t decide anything. You spend what’s left after automation handles everything else.

Common Mistakes

Over-Automating

Automating more than you can afford leads to overdrafts. Leave buffer in checking. Start conservatively and increase.

Set and Forget Forever

Review quarterly. Life changes—income, expenses, goals. Adjust automation accordingly.

Not Checking Statements

Automation doesn’t mean ignore your accounts. Review monthly for errors, fraud, or opportunities.

Quick Start Checklist

Auto-pay all bills — Full balance on credit cards
Auto-transfer to savings — Day after payday
401(k) contribution — At least to employer match
Auto-escalation — 1% annual increase enabled
IRA auto-contribution — Monthly or per-paycheck
Debt extra payments — Beyond minimums, automated
Calendar reminder — Quarterly review

The Bottom Line

Automation is:

Effortless — Set up once, works forever
Consistent — Happens regardless of mood or memory
Effective — Removes the decisions that derail progress
Adjustable — Change settings anytime

The best financial system is the one you don’t have to think about. Build it once, let it run, review quarterly. Your future self will thank your past self for the gift of automation.

How To Win Capitalism