Put Your Finances on Autopilot

The money blogger at Retire at 45 stopped worrying about paying bills on time using automatic transactions and overdraft protection. He writes:

My checkbook has been on financial autopilot for so long now, it's hard for me to imagine it any other way. I spend almost no time at all paying bills, timing my cash flow, or remembering due dates. This enables me to focus more time on my investments, my career, and my family.

He uses his Home Equity Line of Credit (HELOC) as his checking account's overdraft protection—a controversial choice that works better for folks who don't overdraft that often, and who will pay back the HELOC right away when it's been hit. See also how I automate my finances.


    I do mine once a month and post date them in my internet banking when I'm doing my payments so that the money only comes out when it needs to.

    I get paid weekly and my bills come out monthly, which usually leaves me with 2 weeks where I'm flat broke, and two weeks with a bit of an excess.

    Step 1: I created a new transaction account linked to my primary bank account
    Step 2: I arranged with every company to direct debit out of this account (no need for changing the due date)
    Step 3: Sat down, worked out how much by bills would be over a year, divided by 52 to get a weekly amount.
    Step 4: Set up an automatic payment of worked out average amount into the second transaction account on a weekly basis. For the first week I put in the amount twice

    So I always have enough in that account to cover my bills, I also added $5 a week to cover anything extra that might come out above my average working.

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