How To Automate Your Bank Accounts To Make and Save More Money

what if I told you we live in a world where you can 100% automate your finances no this isn't an infomercial this isn't a get-rich-quick scheme or magic this is reality hey there Shelby gross from the young dumb and I broke YouTube channel today I want to talk to you about how automating your finances is gonna save you a ton of money and make you even more automating your finances something that is often overlooked by people and how much it can simplify your life and make it so much easier we have things now like direct deposit automatic transfers automatic withdrawals you can basically do anything automatic or never have to touch it again in your life sounds enticing huh well why don't more people do it honestly I think it's because people just don't know how to and don't understand how simple it is to set up and instead they think it's a burden so they don't do it this leads to our huge problem in America people are not having enough money saved because one since their bank account they automatically just spend it and it's gone if you throw a little automation even the simplest of automation into your finances I promise you before you know it you'll have a good nest egg saved before I jump into some examples I want you to do one thing really quick for me and that is if you could just hit the like button on this video channel is very new I'm trying to spread it around as much as I can and that like helps a ton but now let's get to the whiteboard okay guys welcome to the whiteboard the first thing we're gonna do before we even get into this diagram I don't wanna let you know that the whole point of this video is to just let you know of your options when banking and automating things none of this is meant to demean and you'll want to make you feel dumb if you're in a situation like this it's okay you can always move on from it I definitely do this is how I started out but just to remember that we're all learning here there's no room for negativity so let's get into this first diagram as you can see there are only three bubbles in the average person's personal finance setup those are the paycheck coming in going into a checking account and the expenses being paid out the only automation usually in this setup is right here from the paycheck to the checking account and that is when the direct deposit happens from employer the only reason there's automation here is that often the employer action requires it that's your only option so congratulations step one is done you're automating so why not do the rest of it in America we have a huge issue of people not being able to save enough and instead you're spending everything they have as soon as they get it this is why most people don't even have $1,000 in their bank account today using automation and bypassing these expenses and going somewhere else first it's going to allow us to get to that thousand dollars and well beyond that securing a good nest egg for the future while it may feel great now spending on things you want in 30 40 50 years when you're trying to retire and you have no nest egg built up because you enjoy that satisfaction you're gonna really regret it and this is why automation can help you do all of that I even think there's big power and automating your bill is being paid yes the power of touch is really yes writing a check could help some people manage their money but for the most part it's unnecessary and it's just a hassle on your time so why not automate it and go on to better things when people come to me and ask for help with managing their money this is usually the setup that they're in and you know it is what it is but the first thing I always tell them to do is look at their accounts and see if they have a savings account for the most part you will the reason being is that most banks actually require you to have a savings account if you have a checking account but most people just don't use it I call this my slightly above-average setup so what if we automated that savings account every week when we got paid let's just say we get paid weekly for this example and you spent $50 for your paycheck every single week over that savings account by the end of the year you're gonna have $2,600 in that account that's a ton of money like that's more than most people have in their account right now think about the things you could do with an extra twenty six hundred dollars a year this savings account does more than just puts an emergency fund in your pocket it allows you to build an interest on that money a savings account will always have a higher interest rate than checking on top of that it'll make you manage your money a little more closely because I $50 is going out every single week you're gonna be $50 short here which means less you can spend on your expenses so you're gonna be managing your money a little bit better now I want to take you through my setup well here it is looks complicated I know but this beast is very very easy to understand when you just walk through it and the best thing about all this is it's 100% automated from the paycheck coming in to the expenses going out to the investing everything is automated so let's just go through it one by one to give you some ideas of how yours that might work first like most people I have my direct deposit coming for my paycheck to my checking account but what I've done is I've added two more accounts that my paycheck actually goes to the first being a 401 K which most of you may actually have through work I do as well and I have a travel savings account yes I have a specific savings account set up for travel only what I do is I take a certain percentage of my check and I send it to my travel savings this equates to about sixty to eighty dollars a week just depending on the amount of days that I worked that week that's where I get all of my funds for anything I do travel wise otherwise I don't travel if I don't have the money I just don't do it this is an example something that's kind of outside the box that you might want to consider adding into your financial story let's jump back to up top here to the other income so this is income I have coming in from investments rental properties the website stuff like that all that income flows into my checking account and before I can even spend it on expenses that goes other places first along with my paycheck the first of those places being an online savings account this is my emergency fund I have an online savings account versus using a local one because it gives me a higher interest rate on that money it's about two point five seven percent I just reach let's switch over to wealthfront love-love-love their interface highly recommend it I'll leave a link in the bio for them but the next place that money goes into a Roth IRA this is accruing interest I deposit to this account once a year the max contribution at the beginning of every single year and just get it done then so my money can grow as much as it can on the interest of that year I can take advantage of again and again and again the last place I have money automatically going to is my trading account yes I do trades individual stocks on a weekly basis this is called swing trading - most I have a great article on this I'll link that in the description below as well just warning trading individual stocks is extremely extremely risky I would not recommend it to anyone but I do do it for fun and yes I've been profitable so I'm going to keep doing it as long as I can what you'll notice on these bubbles is a lot of them have the arrows pointed back into each other that's because I don't take any money out of these accounts ever I never have what that means is that all that money that is compounding with interest in these accounts is just continuously growing and growing until it grows exponentially and I plan on keeping those there as long as I can again it's important to remember while this may look extremely complicated to me it's not this has been put together over the last five years this wasn't just something I woke up and decided to do one day your setup is going to be entirely different than mine you may have a five to night education plan or a health savings account there are hundreds of different things you could be doing but just know that automation is capable through every single step in the process so take advantage of it let's say you understand all the accounts that you need to have to set up your finances properly well it's time to put them all together and make a system out of it how do you do this well you have two options you can either go in person to the bank or you can do it online for most people you can actually this all online especially if you use a big bank like Chase Bank of America Wells Fargo I mean really any bank that has an online banking system should allow you to do this but if you use a small bank like a small credit union in a small town they may not have the resources to have the online element available for you so you going to go and talk to them in person scary I know but you can do it as soon as you get the like button on this video no but seriously you may have to go talk to someone in person it's not as scary as you may think and chances are super high that whatever you're trying to do they've already done already for somebody else so the process will probably take a couple minutes and you're done if you're lucky enough to have an online portal all you need to do is look for the word transfer transfer is will lead you to anything you need to do basically so I'm gonna go ahead and flash a screenshot from my Chase account as you can see the transfer right there I'm gonna flash one from my local credit union again transfer right there it's easy you click on that it'll say you want to at one time you want to do monthly how frequently you know how much and that's it you know you just hit submit you're done at the end of the day setting up your system for banking is gonna take a little bit of time I did not get where I am today just by waking up and say I'm gonna do this no this is over five years of manipulating and changing and changing bank accounts all to where I am the date where I really really like how things are flowing I was that average person five years ago that as soon as money hit my bank account it was gone but by applying this system having automatic withdrawals happen I don't see the money so the out-of-sight out-of-mind principle comes into play here which i think is one of the best things you can do for setting up a budget and managing your money well I hope you got some inspiration from today's video and learn something about automating your banking system to help you save more and make more money in the long run if you liked the video make sure you hit the like button and if you want more content like this I'm coming out with youtube videos weekly so hit the subscribe button down here in the bottom right also once a week I put out a blog post on young dumb we're not broke calm they kind of correspond with these videos but they're not always the same so make sure you check me out there and I'll see you in the next

Channel: Shelby Grosch

Views: 376

Rating: 5 out of 5

Keywords: money, real estate, finance, personal finance, making money, passive income, investing, interest, retirement, millionaire, budgeting, young dumb and not broke, wealth, credit cards, traveling, cheap travel, frugal

Id: J4ChapmcyaE

Length: 9min 26sec (566 seconds)

Published: Thu Jul 11 2019