My Automated Personal Finance System

I hardly do any manual work or maintenance for my finances. Everything is pretty much automated, from paying bills to setting aside savings from every paycheck. I learned this system from a book called I Will Teach You To Be Rich, which sounds cheesy but is actually a really good book.

 

personal-finance-system

 

Our Automated System Explained

  • Our income comes primarily from our paychecks. Other Income includes the schooling allowance I get because my dad is a veteran, cash back rewards, and other random sources, like when I occasionally sell my husband’s Jordans on eBay behind his back. 😎
  • I have direct deposit set up so that exact percentages/amounts of my paycheck go straight to: savings (when we’re not paying down our credit card), 401k (just up to the company match), our checking account for paying our second mortgage, and our car payment. Whatever is left over goes to our checking account.
  • The items in the blue circle represent all the different things that are auto-deducted from our checking account: car and home insurance, our donation to our church, our first mortgage, homeowner’s association (HOA) dues, and our utilities.
  • All items that are paid for via credit card are what’s in the red circle. We like to use our credit card as our first source of payment where possible so we can earn cash back. The obvious caveat here though is that you only want to do this if you pay off your credit in full every month, which we used to be able to do and are slowly working are way back up to.
  • Our checking account is set up to automatically pay down our credit card. Again, under normal circumstances this would ideally be paid off in full every month.

Manual Tasks

  • One of the only manual things I do for our finance system is review our credit card statement about twice a month just to check for any errors.
  • I also have to manually transfer money every 15th of the month for our second mortgage because there isn’t an auto-deduct option at this particular credit union. For this, I just create a recurring task in my to-do list app, Things, so it’s still somewhat automated I suppose:

 

pay-2nd-mortgage

 
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