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Automating your money

Trust us, it’s easier than it sounds. Learn how Autopilot can help you build better money habits with less effort.

Despite our best intentions, how many of us have time to actively manage our finances each week?

Active saving and mindful spending are key to financial wellbeing, but it's easier said than done. That's why I've put my money on Autopilot. Instead of spending hours tracking my spending to ensure my needs and wants are covered and then shuffling money around for savings, I automate the entire process.  

So how does it work?

  • A money Autopilot can be used by anyone, here is an example of how it could work for a student.

     

Why a money Autopilot works

The one-time task of setting up an Autopilot system ensures your desired money behaviours become the default position. It removes temptation and decision fatigue by making your mindful spending decisions up front and ensures you actively save by “paying yourself first”. 

Automated transfers mean your money is divided up each pay day, separating saving and spending goals into different bank accounts. This way, you can easily track your progress with a quick glance at account balances, eliminating the need for time consuming expense tracking or spreadsheets.  

Creating transparency around your money allows you to focus your attention on the money decisions that matter. 

 

Setting up a money Autopilot

A basic autopilot system helps you to save, ensure you set aside money to pay for your needs (the essentials) and use what is left to enjoy life (your wants).  It is easy to set up. 

 

Step 1 – Set up your bank accounts 

Allocate or open separate bank accounts for savings, needs, and wants.  Bank First has a range of savings and transaction accounts you could consider.  More details on the types of accounts to use are provided below. 

 

Step 2 – Arrange for your salary to be paid into your save account

Apply the principle of 'pay yourself first' by asking your employer to pay your salary paid directly into your savings account. This ensures you're actively saving from the get-go, including any additional income from overtime or bonuses. 

 

Step 3 – Allocate your mindful spending plan 

  • Decide whether to manage your money  weekly, fortnightly or monthly  

  • Determine how much of your salary is required for your needs and your wants each period 

  • Set up a recurring transfer for these amounts from your savings account to your needs and wants accounts the day after pay day. 

Read more about mindful spending with Autopilot.

 

Step 4 – Automate your bills 

Set up direct debit (PayTo) arrangements or use your debit cards for subscriptions. Essentials like rent, internet, and utilities will come from your 'needs' account, while you can pay for streaming subscriptions or your gym membership from your 'wants' account. 

 

Step 5 – Streamline day to day spending

Use two labeled debit cards for daily spending – one for needs and one for wants. This way, you can easily pay for purchases from each account and you’ll know if you are on track with a glance at your remaining balances. 

 

Step 6 – Monitor and refine

Life changes, and so do our expenses. Fortunately, tweaking your Autopilot system is simple.  Just adjust the amounts of your recurring transfers between accounts to match your evolving needs and wants.

Customise your system to fit your lifestyle and savings goals. Consider adding additional accounts for specific goals, like a holiday fund. Read more about how to develop a mindful spending plan for your Autopilot system. 

My suggestion? Don't aim for perfection, just get started. You'll learn from any hiccups and soon it will become second nature. Autopilot simplifies money management – savings grow, bills are paid on time, and you know exactly how much you have left for extras. Put it on autopilot – it's that simple. 

Choosing bank accounts for autopilot

Select bank accounts that best suit your needs and without any ongoing account keeping fees.

  • Choosing a savings account that pays interest can boost the benefit of your autopilot system. Your main savings account will likely be where your salary is deposited, but you could consider additional savings accounts so you earn interest while putting aside money for specific goals like an upcoming holiday.

    Interest rate

    You could choose a savings account with a competitive interest rate, ideally higher than the Reserve Bank of Australia Cash Rate. Check for any conditions required to earn the advertised interest rate like minimum deposits or no withdrawals and be confident you will always meet those conditions.  Be cautious of attractive introductory rates that drop significantly after a few months.  Instead of chasing the best interest rates and constantly switching accounts, focus on maintaining your Autopilot system and focusing on mindful spending for better long-term results. 

    Payment options 

    Ensure you can transfer money from your savings to other accounts automatically. If you plan to set aside money for large expenses like car registration, consider a savings account that supports BPay or direct debit (PayTo) transactions so you can set and forget bill payments.  

  • Accounts for spending, especially day-to-day spending, should prioritise flexibility in payment methods and access to your money.   

    Interest rates 

    Most transaction accounts don't pay interest on balances, which shouldn't be an issue since your day to day ‘needs’ and ‘wants’ accounts won’t hold high balances. 

    Payment options 

    Have a debit card for each spending account and the ability to withdraw cash fee-free from ATMs. Most supermarkets also allow cash withdrawals of up to $200 at the checkout. Your transaction account should also support direct debit (PayTo) and BPay for regular payments. 

  • If you have a mortgage, an offset account can be integrated to your Autopilot system. Offset accounts are ideal for “save” accounts, but they can also be considered for spending accounts when they have the appropriate payment options.  Bank First have several home loan options with offset accounts.

    Interest rates  

    Offset accounts don’t pay interest, but help reduce the interest charged on your mortgage, effectively earning the same rate as your home loan. 

    Payment options  

    Most offset accounts support direct debit, BPay and transfers to other accounts, making them ideal for managing savings and regular payments. Some even offer debit cards which make them perfect for ‘needs’ and ‘wants’ accounts 

Looking to power up your money?

Find more Bank First content on Financial Wellbeing to help you make the money stuff easy.