Put Your Money on Autopilot

Put Your Money on Autopilot

by Center for Personal Finance editors

Streamlining your finances with online tools is about more than just saving time—it's fun, helps you avoid late fees and overdraft fees, and helps you save money.

Set up direct deposit
Find out if your employer offers direct deposit—most do. To sign up, all you usually have to do is take a voided check to your human resources department. Your paycheck should appear automatically in your account within a few weeks.

Authorize electronic payments
With electronic payments, you can pay every bill you have using one or more automated options:

• Regular, uniform payments that will continue for a long time (mortgage): Authorize a creditor (such as your credit union) to take money directly from your checking account using the Automated Clearing House (ACH).
• Bills that only pop up annually, semiannually, or monthly (car insurance) or that change in amount (cellphone): Set up your online account with your credit card to pay in full automatically before the due date.
• Bills from vendors or service providers: Take advantage of electronic transfer, also known as online bill pay. If the merchant isn't set up to accept these, ask your credit union to automatically issue a paper check debiting your account. You can set up payments 24/7, adjust payment dates to jibe with your paydays, and make optional extra payments when you want.

Automate routine savings
Set up automated transfers from checking to your savings account(s), and you'll always be financially ready for an unexpected car repair and for infrequent but larger bills like insurance premiums.

Get overdraft protection
To make sure you're never penalized for overdrawing your checking account, set up an overdraft protection savings account or line of credit at your credit union.

Track at your convenience
Once you've automated your finances, use your credit union's website and mobile services to track your accounts and transfer money between them. Check accounts frequently to make sure your automated plan working the way you want, and to monitor for attempted fraud or ID theft.

Published September 29, 2015