Ramit Sethi’s 5 Steps To Automatic Money Flow

Ask any mom entrepreneur if she’d like to save time and money and you’ll hear a resounding YES!

Ask any mom entrepreneur if she’s good at managing her personal and business finances and you’ll hear a resounding NO!

Well all that’s about to change with the help of Ramit Sethi’s 5 Steps To Automatic Money Flow.

According to author of The New York Times best-selling book and blog I Will Teach You To Be Rich, Ramit Sethi, the trick to managing your finances and saving time & money isn’t willpower or doing away with your daily latte – it’s automation, a key fundamental in money management that will help you save more money and more time.

Automation lets you enjoy those small things you love, like lattes or designer jeans, while ensuring that your savings account automatically grows each month. Automation saves you time, since you won’t have to handwrite checks, stuff envelopes or drive to the post office. Automation can even increase your credit score by preventing missed payments that can cause your credit score to drop as much as 100 points – and a better credit score might help you get that loan you need to launch or expand your business.

Ramit shares with The Mogul Mom his 5 steps to creating an Automatic Money Flow to manage your personal and business finances:

1. List your accounts in one place.

To set up, compile a complete list of all your bank and credit card accounts, their URLs, the logins and passwords. Ramit recommends 1Password to store this information.

2. Link your accounts.

Log into each account and link your accounts together to set up automatic transfers from one account to another by using the “Link Accounts,” “Transfer,” or “Set Up Payments” options.  Connect your paycheck to your 401(k), so it’s automatically funded each month; your checking account to your savings account; your checking account to your investment account/Roth IRA; and your credit card to any bills you’ve been paying by using your checking account.  Link bills that can’t be paid by credit card, like rent and loans, to your checking account and use the bill-pay feature.  Have all your credit card accounts paid from your checking account. The links are free and electronic, but allow three to five days for the accounts to verify the links.

3. Organize and consolidate your billing dates.

You’ll want to reset your billing cycles to create a well-timed Automatic Money Flow. Gather all of your bills and call the companies to switch your billing dates. Most of these will only take five minutes to do, but once it is done all of your bills will arrive at the same time, and you can now go into your accounts and set up your transfers.

4. Set up your automatic transfers.

Once your accounts are linked together, set up the core of your Automatic Money Flow: automatic transfers and payments. Work with each individual account’s website to make sure your payment or transfer is set up for the amount you want and on the date you want.

5. Tweak the system.

You may need to adjust your Automatic Money Flow to match your payment schedule.  If you have irregular income, making your accounts automatic may be harder to do, as the amount in your accounts will fluctuate – but it can be done.  Decide what you need to live on, and add a savings goal of three months. Once you have saved up for three months, you may start investing your money into other accounts.

Now your money management is on autopilot. Not only are your bills paid automatically and on time, but you’re actually saving and investing money each month. It works without your involvement and it’s flexible enough to add or remove an account any time.  You’re accumulating money by default, and saving time and money.

Ramit’s automation system has helped thousands of people automate and get on with their life so they can live a rich life by focusing on the things that matter.

Ramit is regularly featured in The New York Times and The Wall Street Journal. He has been a regular guest on ABC and has appeared on The Today Show and NPR. He graduated from Stanford with undergraduate and graduate degrees, where he studied technology and psychology. He recently moved from San Francisco to New York City.

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Heather Allard

Heather Allard is a mom of three kids + one big rescue dog. She's a wellness buff, an essential oil educator with dōTERRA, and a self-professed “entrepreneur to the core”.
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7 Comments

  1. Susie Autry

    I endorse all that was suggested but also want to add some thoughts/ideas that I have used. I open all mail daily, throw junk and envelopes away and store the balance in one spot. I only sit down to pay bills once a month on the 26th. I have already moved all of my due dates so that this works. Billers don’t want you to move your requested date further but if you request to be billed sooner (in other words, two bills in the first month) they go for it every time. I have everything automatically deducted that can be, use my mileage credit card for everything possible, and use epay from my interest accruing checking account for what is left. (At today’s rate, interest is hardly worth mentioning.) I can pay bills in ten minutes now and my checkbook is always balanced. I have one suggestion though, saving only 5% monthly in your 401k and IRA isn’t going to cut it come retirement time. Social Security won’t exist and we have all gotten used to living at a certain level. Unlike the federal government, you have to save now if you want to play later.

    Reply
    • Heather Allard

      Susie!

      Thank you SO much for sharing your tips! I’ve been looking for an easy way to pay bills and balance my checkbook, so I am definitely checking out (no pun intended) epay.

      Appreciate your comment!! 😀
      Heather

      Reply
  2. Alex Papa

    Linking your accounts is a great idea. My wife I together had over 8 personal and business bank accounts with various banks. Each account served a different purpose and it was not easy to manage them separately. Bringing all the accounts together in one bank, linking them together and setting up automatic transfers for monthly payments gave us back 3-4 hours of our week. It does work!

    Reply
  3. Tammie

    I have almost all my bills automated (I have to manually do electric/gas but it’s online so no sending checks) now I just need us to make enough money for it to not be 95% going to bills!!!!

    Reply
  4. Candis Hidalgo

    This is great! I have some bills automated but many I still send checks to, and I don’t yet have money automatically being transferred to savings. Such simple advice… I look forward to getting started with this.

    Reply
    • Heather Allard

      Glad you like it, Candis! It *is* such simple advice – now we just have to take it. LOL.

      Heather

      Reply
  5. Neena

    Very good points. It is so hard to get organized when accounts are all over the place. Personally – the amount of paperwork (even virtual paperwork) has increased exponentially over the past few years – and staying ahead of it all is very difficult.

    Reply

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