Credit Card Andy

Teaching the Basics of Personal Finance

A Paradigm Shift - Plan and Schedule Automatic Transfers to Manage Your Money Efficiently

Money Robot

This is a necessary follow-up to Spend 1 Hour Budgeting Your Life and Never Think About Your Money the Same Way Again.

If you haven’t already, go back and read that post. It’ll get you started you on the path of automating your finances and a better life.

You’ve done the basic budgeting like I suggested? Great! You should have your monthly expenses, your long-term savings contributions, and your short-term savings.

Here’s what you do with those numbers.


First, take all of the bills you pay and sign up for the auto pay feature if it’s offered. Take your cell phone, internet, gas, electricity, etc. bills and automate as much of it as possible. See if you can have it charge your credit card so you can get some nice rewards/cash back. If not, you may just have to link your bank account.

Here’s why I choose the automatic payment option for my bills:

  1. It consolidates all my bills. I can go look at them on my credit card and bank account activity.
  2. I am lazy and don’t want to bother going to several websites and paying bills separately.
  3. If a charge looks wrong, I can always get it fixed. The key here is to have a small cushion in your checking account in case you’re accidentally overcharged.
  4. I get rewards.
    I check my credit card and bank account activity several times a week out of habit. I think I have more to gain from automating these payments than the potential risk of being overcharged (and this can always be fixed afterwards).

I also have my credit card set so that the FULL BALANCE is paid off every month automatically. This guarantees that I pay my bill on time and in full every time. Again, I monitor my credit card activity as well as my checking account often. Monitoring is something I’ve always done anyway. Now I have one less thing to remember - paying my credit card bill.

At this point, you should have your monthly expenses as automated as possible. There are some bills that you may not be able to auto pay (utility companies are notoriously slow with adopting new technologies). The goal is to automate payments as much as possible. If you can reduce your bill monitoring from 6 to 2 bills, you’ve saved yourself a ton of stress.

Okay, so that takes care of your monthly expenses.

Automatic Transfers

Retirement accounts such as your 401k and/or Roth IRA should be relatively straightforward. You can go into the brokerage account and setup a recurring monthly transfer.

In terms of short-term savings, I suggested you create little buckets for yourself. I created Vacation, House, and Wedding buckets in my example. Most banks have the ability to create sub-accounts. Do a search on how to create sub-accounts for your bank since it might be a bit hidden. With Ally, I had to sign up for sub-accounts through a process that looks very similar to creating a brand new account.

Create as many sub-accounts as you have categories and make sure to name them. In your savings account, you should be able to set up recurring monthly transfers from your checking account to your savings.

Here’s what it could look like:

Ideal Schedule

Isn’t that just beautiful. By the 3rd of the month, you will have saved money, contributed to your retirement, and paid off all your monthly bills. BOOM, just like that. This is all assuming you get paid once a month on the 1st.

That would be a pretty ideal situation. In all likelihood, your schedule won’t be as perfect. Take mine for example. I actually get paid twice a month. I also had a difficult time changing the dates on my bills (mainly the utilities). So I had to adjust.

Here’s what my schedule actually looks like:

Actual Money Schedule

What I realized is that if I can’t get all my bills to line up nicely, then I’ll just live with it and always carry a small buffer in my checking account. I also had to adjust my automatic transfers so that they were half of what I calculated earlier in my budgeting exercise because I’m paid twice a month instead of the normal once a month.

So things don’t line up as nicely as I want, but the main point is that everything is still automatic. There could be a 100 moving parts, but if its’ all automatic I don’t really care.


I want to note here, that when I first started automating my finances, I gave myself more room for example. Instead of having the automatic transfer occur right after my paycheck, I made it happen 5 and 7 days after my paycheck. After I made sure it was all working, I adjusted it to happen right after my paycheck. Make sure you have a decent buffer in your checking account the first couple months you are figuring things out.

A Paradigm Shift

Make your bank accounts work for you. Think about your financial situation as a factory. Each bill that you pay is a separate division of the factory. You are the only worker and you are running around to each division of this factory and making widgets all by yourself. Think of how tiring it is to run around your factory (visiting the different websites to pay the bills) month after month. Why not hire some robots and put them at each of the many divisions of your factory? Now all you have to do is quality check what they produce every once in a while! See what I’m getting at?

Not my best analogy. My point is, you have to shift the way you think about things. You shift from the old paradigm of worrying about individual bills to a new one where you have it all deduct automatically and you just make sure everything looks good.

I hope that gives you enough to go out and change the way you handle your money. So far, this has to be one the biggest game changers for the way I look at and use money. I may have hurdled a lot of information your way in the past couple posts. Let me know if you have any questions or you think something could use clarification.