How to clean up finances with some automation | personal finance

Automating financial tasks sounds like the perfect way to check mundane items like saving and paying bills off your to-do list with minimal effort. But there is a potential downside to giving up manual control.

When you automate invoices, you’re less likely to review them and notice errors, or catch yourself overspending. When you automate savings, you may forget to make adjustments as your goals or income change. As certified financial planner Catalina Franco-Cicero says, “Someone has to make a decision and it has to be a human being, not a machine.” That’s why she suggests using automation along with frequent reviews and updates.

While signing up for automated bill payments and savings transfers may be part of your financial spring cleaning, consider these strategies from financial experts.


Ambus Hunter, a licensed financial advisor in the Baltimore area, encourages clients to study their cash flow before setting up automatic payments. That means keeping a close eye on the money coming in and going out each month, including the specific dates of those deposits and withdrawals.

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“I don’t like random automation. If you’re not paying attention to cash flow and just setting up a few withdrawals here and there, it can trip you up,” he says.


The easiest bills to automate are the ones that don’t change: car payments, condo fees, phone and cable bills, and insurance payments, for example. You can reap benefits like avoiding late fees without worrying about getting a huge transfer, says John Mason, CFP and president of Mason & Associates in Newport News, Virginia.

“I would draw the line on variable charges, like your water bill, electric bill, and credit cards, unless you’re disciplined enough to review those statements carefully, even if they’re automated,” he says.

Ashli ​​Smith, who lives in Atlanta and shares money tips via her @BadGirlFinances Twitter account, automates invoices that generate discounts for doing so. Many cell phone providers offer monthly discounts of $5 or more for using autopay, and insurance providers often offer similar discounts. Enrolling in automatic payment for student loans can get you an interest rate reduction of 0.25 percentage point.

Smith notes that you can often select the day of withdrawal to ensure it’s before the due date, but after your paycheck is deposited to avoid overdrawing your account.

“Start small. Don’t put your rent on autopay if you’re not comfortable with that, but try small bills like phone bills,” she suggests.

With credit cards, Smith says you can set the automatic payment for a certain amount to ensure you pay at least the minimum, or set a higher amount to pay off any accumulated debt. He can use minimum payment automation to ensure he’s never late, and then make additional payments throughout the billing cycle to reduce his credit usage and improve his credit score.


Erin Lowry, author of the “Broke Millennial” book series, recommends checking to make sure payments have been made. She had been automating her rent payment for six years when she noticed her payments stopped processing earlier this year.

“I never had a problem, so I was a little lazy to check if it worked,” he says. Then he realized that he had a much higher bank balance than he expected. He found out that his rent had stopped processing, a problem he had to fight to fix.

Automating an invoice doesn’t mean you have to stop looking for better options either. Franco-Cicero, who is also a wealth advisor at Tobias Financial Advisors in Plantation, Fla., says that when it comes to auto insurance, for example, it pays to check discounts and compare options each time your policy renews.


In addition to signing up to automate retirement contributions in every paycheck, Mason suggests automatic savings for other goals. Every time he cuts costs to free up extra money, he says, “I try to capture it right away so it doesn’t get lost in the shuffle.” He cautions that he’ll want to review savings regularly and make sure he has enough money in his checking account to support the transfers, along with all of his other bills.

Adrienne Taylor-Wells, accredited financial advisor and founder of Tailored WealthSaver, an advisory firm in Houston, points to an additional automatic savings strategy: “I encourage clients to put savings into a savings account at a separate bank so it can be harder to get that money and easier to save. Apps like Digit and Qapital can also help you automate those transfers.

Still, manual adjustments are often necessary. Taylor-Wells started the year saving for laser eye surgery in August and created a spending plan to reflect that. But when her optometrist offered her a $600 reimbursement for a 12-month supply of contact lenses, she opted to delay the surgery until January 2023, giving her more time to save and allowing more discretionary spending as well.

“There are certain things that an app can’t automate,” he says.

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