The first step is to figure out how to set up direct deposit. Most companies offer this feature, if you don’t know if they offer it, speak to your HR department.

The bare minimum that you will need will be a checking account. There are plenty of free online accounts that will make it so you will never have to worry about a minimum balance. I personally use Ally Bank and have multiple free checking accounts.

The only downside to using an online bank is that you don’t have a way to deposit cash. If that is a deal-breaker then you can go to any major bank and set up an account. There is a high probability that they will waive any account maintenance fees if you have a certain amount in the account every month or direct deposit.

 The main goal for your checking account will be to pay your mortgage/rent, utilities, monthly debt payments, cell phone, and internet bill.

For more flexibility, you can open another checking account to pay for your variable expenses, like eating out, clothes, date nights, and your daily diet soda.

Next, you need to open a savings account, you can get free savings accounts with Ally and Marcus, to automate your emergency funds or savings goals, like a house down payment.

This step has been a game-changer for me and my wife, especially when it comes to building our emergency fund! Personally, I keep my emergency fund at the same bank as my main checking account so I can access funds quickly.

I also opened up additional savings accounts to set aside money for tithing, have you ever been too lazy to pay and then had to pay a couple of months’ worth of tithing all at once?

Yeah, that hurts…

Now you never have to worry about that because your tithing has a dedicated account just for it to sit there until you pay it.

We also have additional savings accounts that hold money to cover our insurance deductibles if we ever got in an accident or need to buy a gift for the 100 nieces and nephews I gained after getting married!

I sleep a lot better at night knowing I have a plan and money set aside to cover most financial situations.

If you don’t want to worry about all that, a single checking and savings account will suffice.

Now that you have your accounts set up, let’s talk about taking control of your bills and expenses.

The first thing you want to do is set up autopay for all the bills that you have so you don’t have to worry about logging in to an online account, try to log in multiple times till you hit forgot password, and then get told you can’t use your current password as your new one!

With autopay set up, you never have to worry about making a late payment or worse, missing a payment.

Once my autopay was set up I created a budget to help me track where my money goes. Initially, I started with Mint, but just recently I signed up for a paid subscription to You Need a Budget.

You can learn more about Mint and You Need a Budget here.

The reason for using software is to track my expenses and hold myself accountable for how I spend my money without having to write down all my expenses or manually plug them into excel.

The goal of having a budget is to identify subscriptions and trends that you can get rid of to help save you money. At a minimum, I suggest you sign up for Mint since it is free.

By now you should have your savings account set up with a direct deposit, allowing you to grow your emergency fund each time you get paid.

Now let’s talk about how to build your wealth through automation! Once your savings account has more than 12 months’ worth of expenses you will want to focus on investing the rest.

You NEED to have a 401k or whatever employer-sponsored plan you have access to if your company provides a match. Your goal is to take advantage of the match and over time slowly increase the amount you put towards your 401k until you can max out your contribution limits each year.

Your 401k contributions should be going to the Roth portion of your 401k, if available. Your employer will have to place their match in the non-Roth portion due to tax purposes.

Now that you are receiving your company match, open up a Roth IRA and work towards maxing that out every year before you max out your 401k /Roth 401k. Some key benefits of a Roth IRA over a Roth 401k are thousands of more investment options, cheaper investment options, and in case of an extreme emergency, you can access your Roth IRA faster than your 401k (this better be serious). Your 401k provider would make you take a loan on your 401k if you want to access funds compared to a Roth IRA that is readily available in your brokerage account.

I will have to create a post in the future to cover this topic, but for now, check out this article!

Once you can max out your 401k/Roth 401k and IRA/Roth IRA, now you can start funneling money into a taxable brokerage account.

As you earn more money you will be set up to naturally increase the amount you pay yourself through following these steps. As you become more aware of how you utilize every dollar you earn you will have a system that will make it easy for you to build wealth and prepare for most types of emergencies.

Remember to tailor this system to what works best for you.

Please comment below on how you currently automate your finances or what you plan to use from this system!