How to Automate Your Personal Finance?

Hello Wealth Builders!

First, I want to thank you for dropping in to read my article on “How to Automate Personal Finance”. I hope that I will be able to add value to your life by the end of this blog.

Today, I want to share to you a simple practice that I do to budget my money without really getting too involved in the process.

Of course, there are lots of ways to do budgeting and I’m not saying this is the best budgeting method out there. In contrast, my method of budgeting has helped me a lot in keeping my expenses in checked and it allows me to save for future big purchases or to have funds in times of emergencies.

In this post, I will share to you how I made my personal finance fully automated. This is made possible by taking advantage of online banking and the services it provides especially the automatic transfer from one bank account to another.

What is ‘Personal Finance’?

According to personal finance is, “everything to do with managing your money and saving and investing. It covers budgeting, banking, insurance, mortgages, investments, retirement planning, tax planning, and estate planning.”


In other words, personal finance is everything to do with how you handle your income and expenditures every month. The goal of personal finance is to ensure that your expenses should be equal to your income at the end of the month. It forces you to live according to your mean and it makes every dollar you own work for you.

Why It is Advantageous to Automate the Process?

We are lazy to budget or scared to deal with our finances but finances greatly affect the quality of our life

Many of us are lazy or don’t have time when it comes to managing our personal finances while others don’t want to look at it because they can’t handle the truth of their financial situation. Ironically, personal finance is one of the key areas in our life that needs to be kept in-check regularly since it greatly influences the quality of our life. For example, a poor personal finance often leads to stress and anxiety. Finances are actually one of the leading reason why marriages fail.

Automated budgeting can do the bulk of our budgeting system so no need to spend a lot of time recording your expenses

I tried different ways to create my budget such as creating a spreadsheet on Microsoft Excel, downloading a budgeting app, writing my expense on a note app or paper notebook, etc. but at the end of the week, I give up because it is too tedious.

My initial strategy to ensure I practice good personal finance is to keep my income greater than my expenses. To do this means I need to cheap out on almost everything. However, I realize that even though I have lots of savings at the end of the month, those extra dollars are not working for me because I don’t properly budget it. In addition to, this method is not psychologically healthy because I never enjoy the fruit of my labor. Finally, this strategy doesn’t work well as you get older because the number of responsibilities you have increased so does your bills.

The solution that I come up is to allocate my income to different online saving account instead of doing a budget. Yes. Allocation of money is technically the same as budgeting but allocating your income only requires you to understand your income/expense only once in a while. The best part of allocation is I can automate the process, so I do not need to worry about keeping track of where my money is going every single time.

How Can We Automate the Process?


Step 1: Know your Income

The first step of the process is to know your income. This is straightforward if you have a job where you receive a paycheck month after month but it is trickier if you are a freelancer or a small business owner whose income varies monthly.

Regular Monthly Earner: Determine all of your after-tax income then add it to find your total monthly income

If you are getting a paycheck every month, then all you need to do is record your monthly after-tax income from all of your work/sources on a notebook or in a spreadsheet then sum up the numbers to get the total income.

Freelance or Small Business Owner: Determine all of your 12-month-average-after-tax income then add it to find your average total monthly income

If your income varies every month, then you have to calculate your average monthly for the last 12 months. The math is very simple:

  1. Just add the last 12 of your after-tax monthly income
  2. Divide it by 12.
  3. The number you get is your average monthly income!
    1. NOTE: Repeat the calculations if you have 2 or more incomes like this then get the sum of all of your income at the end.
  4. Record the numbers on a notebook or in a spreadsheet.

Step 2: Know your Expenses

After knowing your income, the next step is to know your monthly bills. Monthly bills are the one that you have to pay every month to get the services you need. Examples of monthly bills include subscriptions, rents/mortgage, utilities, home, and car insurance, investments, etc.

Determine all of your monthly bills, list them all down and sum it to determine your total monthly expenses

Step 3: Determine if You are on a Surplus or Deficit

After calculating your total income and total expense, determine if you have excess money or if you need more. You can do this by simply subtracting your total expense from your total income:

Total Income – Total Expense = Money Left/ Money Needed

If you need more money, then I advise you to either increase your income or look for items that you can cut costs, cut back or cut out.

If you have surplus money then thank God for that extra blessing. However, you don’t want your cash to be idle. You want them to be working! For now, I want you to hold on to that money and I will explain later step what we will do with it.

Step 4: Set up an Online Bank Account

Setting an online bank account is a must to this method. In fact, I will ask you to open up multiple bank account. The good news is opening a bank account nowadays is as easy as setting up a Facebook account. It will also not cost you anything to open an online saving account as long as you don’t use it to pay your bills.

I will show you a quick example below on how to open an account. You will need to open one chequing account and multiple high-interest online accounts for this budgeting system to work.

There are two ways to open a bank account. First, you can do it online which I will show you how below. The other way is for you to go to an actual bank like good ol’ days and ask a bank associate to set it for you. You can also ask them to help you use your new online bank account if you do not know how to use an online bank account.

[ Note: I used Royal Bank of Canada as an example simply because that is what I am using, therefore, it is the bank I am most familiar with. I am not an affiliate of nor making any recommendation of the said bank.]

Find your favorite bank in Google

The first step is to find the website of your preferred bank. You can easily do this by doing a quick Google search. Simply type the name of your bank on Google search bar then hit enter. Google will transfer you on your preferred bank’s homepage.

Look for “create an account” option in your bank’s homepage

Source: Royal Bank of Canada

Once you are in your preferred banks’ home page, find the option that allows you to create a bank account. In my case, clicking “Accounts” transfers me to account options page.

Source: Royal Bank of Canada

Choose and open an account that suits your needs.


Also please pay close attention to the account’s monthly fee! It is desirable to pick an account type that doesn’t charge any monthly fee but see what that account type has to offer. It doesn’t make sense to get a free account but you will pay a lot of transaction fees. Choose an account that suits your needs, but do not be tempted to apply for an expensive account just to get a free I-pad.

Please also note that banks often give a rebate if a customer has multiple accounts with them (retirement saving plan, tax-free account or credit card). Make sure to ask to get these rebates

If you don’t know which account type is best for you, please go to your favorite local bank and ask the associate to help you choose the perfect bank. Keep in mind that these people are salespeople so don’t let them give you an account with expensive monthly fees.

Step 5: Open Up Multiple Savings Account

Once your chequing bank account is set up, then the next thing you need to do is to open multiple saving account. You can do this by accessing your online bank account. The process of opening one is different per bank, so you will have to look around how to. If you can’t figure it out, be sure to contact your bank’s customer service. I know they will be happy to help.

Note: Online access is automatically given when you open a chequing bank account even if you open your bank account with a bank associate and not online. Ask how you can access your online bank account.

Step 6: Rename Your Bank Account as per its Use

This step might seem trivial and looks like it is just for fun, but I promise you that naming your bank accounts has its own benefits. For instance, it challenges you to save more and avoid undisciplined withdrawals. If you have an account named “Wedding”, then it will remind you that the savings account is for your wedding and not for something else.

Have an online saving account for emergencies

I want you to create one account dedicated for emergency purposes only and name the account (well you guessed it) Emergency Fund. You should allocate money to your emergency fund for emergency purposes such as emergency car repair, house repair, medical bills, and at least 3 months worth of your current income.

Have an online saving account for life and leisure

Think of something or an event that will need a large sum of money in the future then create an account and name it after the thing or event that you are saving for. For example, if you need to save for a wedding then name the account, “Wedding”. If you want to buy a house then name the account, “House Down payment”, and so on.

Have an online saving account for about everything and anything

Again, think of other things you need to save for. Maybe you want a new car, or you love to collect shoes. There are some who needs clothes, shoes and makeup. I don’t know your needs so it is only you who can determine it. Whatever it is make sure to create an account for it and allocate money to it, so you would not aimlessly spend all of your income on these things. Your savings account will show you the numbers on how many of these items you can buy.

Name Your credit card “Guilt Free Spending Fund”

Finally, if you are using a credit card, then change your credit card account name into, “Guilt Free Spending Fund”.

WARNING! Yes, you can name your credit card account as “Guilt Free Spending Fund” but I’m not saying that you will use your credit card and start spending guilt free!

First of all, before you name your credit card account make sure you have a good credit score and have the ability to pay your monthly bills. If not, then do yourself and your loved ones a favor, and cut your card now and start paying those bills. I know it is harsh but trust me, this will be good for you.

If you can pay your credit cards every month then proceed to step 7.


Step 7: Automate the Process

Okay! I see that you opened and named your bank accounts as well as your credit cards according to their use. In this step, I will teach you how to use them.

Remember the excess money you have that you after subtracting your expenses from your income in step 3? We will allocate those in your different bank accounts. The percentage of how much you will allocate to each bank accounts will depend on you.

For example:

Say you have $1000 dollars left after subtracting all your monthly bills from your income and you prioritize putting that excess money to your emergency fund, then you might want to automatically transfer 50% of your leftover dollars to your emergency fund. That means $500 a month will go to your Emergency Fund account.

After doing that step, you will be left with only $500. You can then automatically transfer $200 from $500 that is remaining to your life and leisure fund. Finally, you can automatically transfer $300 dollars to your credit card or guilt-free spending account.

Note: Each bank has different steps on how to automatically transfer money from one bank account to another. Once you determined how much you will transfer from one account to another, then feel free to look around to figure out how to do the transfer. If you can’t find out how then please call your bank’s customer service again.

Step 8: Review and Adjust Process Once or Twice a Year

Your expenses will surely vary from time to time so I urge you to regularly check your income and expenses at least every quarter then adjust your online transfer to reflect your current needs. Other than that, you are good to go.

It is up to you if you still want to continue to track where your money goes, but overall, you shouldn’t run out of money. You should also be able to save up for the things that you like and rewards yourself from working hard.

That’s All For Me

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2 thoughts on “How to Automate Your Personal Finance?”

  1. John. This is the most well thought and and common sense way to automate my finances I have ever come across. Thank you for every singe suggestion here, What I like the most is the common sense, and that it is absolutely FREE:)

    I believe I want to follow you with close open eyes with this type of advice on offer. I agree that analyzing ones budget can be scary, but the importance is more and more prevalent as I get older. Especially to grow that emergency Fund.  Do you think it to be wise to use a term deposit with that specific type of savings.?

    Regards Rob

    • Hi Ropata, 

      Im glad my post was able to help you! 

      Yes budgeting is really important to everyone regardless of age, gender or income.In addition to, like what you have mentioned, when we get serious on doing a budget we are able to prepare for any financial situations. 

      Unfortunately I am not familiar with term deposit, nor I am a license financial advisor (…yet) so I cant help you on that topic, but Ill let you know when things change. 

      John Greg


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