Wednesday, October 28, 2009

Degrees of Success: Automating Finances

Remi Sethi has a great chart laying out what fully automated finances would look like.

While I really aspire to reach that level of automation, I'm really happy with a *nearly* automated system that's been about a year in the making.

What is Automated
  • income is direct-deposited into our checking account, monthly for me and weekly for the hubby
  • my retirement contributions (15%) are automatically deducted from my check before I ever see it
  • savings is scheduled once a month from my check (12%) and once a week from hubby's check (7%)
  • started a Roth IRA for hubby with small monthly scheduled deposit, will ramp up when the truck is paid off
  • most of the bills are automatically paid: electric, gas, cell, student loan, child support, truck loan
  • credit cards are automatically paid in full at the beginning of the month

What is Not Automated
  • some bills are manually entered into billpay because the amounts change from month-to-month or they are not delivered electronically: cable, water, insurance, mortgage
  • union dues for the hubby are paid by mailing a physical check and are due monthly
  • church tithes are paid with a physical check each week
Our savings aren't broken out into several sub-goals yet. There are currently two piles, emergency savings (untouchable) and regular savings (spendable). The goals I'd like to set up as separate funds are: next car, gifts, and home improvement. I'll try and set those up in my Ing account soon and report back with the math for setting those goals.

Julie Pickett-Hall

You also might be interested in:
- another post from Remi on how to set up sub-goal accounts using your Ing account
- comment or email me to get a $25 bonus when you sign up a new Ing account

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