In his book, The Automatic Millionaire, author David Bach teaches us how we can build security and wealth by automating our finances. It is possible for this to happen. Mr. Bach does a masterful job of selling his plan. And depending on your situation, this approach may be the best plan for you, but for the majority of us, this is a game plan for disaster.

I know, you have an extremely hectic schedule, therefore, automating can save you time. So why would it make sense to go to the bank when your check can be direct deposited? Why see a teller when you can use an ATM? Why send in a payment when you can automatically have your payment withdrawn from your bank account? Why take the extra step of making a savings deposit, when you can have it automatically taken out of your direct deposit? Since God wants me to tithe, why not take advantage of automatic tithing?

These are all legitimate questions. In fact, I could probably make a compelling argument on why you should automate your life. But is automation making your life simpler? Albert Einstein was quoted as saying. “Everything should be made as simple as possible, but not simpler.” pause for a moment and let that sink in. If you are like me, that quote is confusing at first. What is the difference? The difference is how we define simplicity. We usually think of it as meaning the easiest, quickest or most convenient. Using that mindset is what gets us in trouble. Instead, let’s think of simplicity as making our lives less complicated and removing financial clutter from our lives.

Too often we have taken the automation tools, which were designed to make our lives less complicated and more efficient, and have used them to distance ourselves from our financial reality. Everything gets done automatically; we no longer have to pay attention. And as long as no issues arise, we can assume that our financial situation is strong. We quickly learn to base our financial decisions on what is easiest, quickest and most convenient, instead of taking our time to think about what is the best solution for our family.

Let’s look at the following scenarios, and see when automation makes sense for you and your family:

Direct deposit v. Manual deposit

Without a doubt, take direct deposit. Generally, your paycheck will be deposited on your payday or the day prior. This is especially significant if you work for an employer that mails your paycheck. However, you MUST verify that the deposit has been made. Don’t assume because it always has been in the past. Either go online or call the bank. It is your responsibility to make sure that you have the funds before you spend them. Secondly, you need to examine your pay stub. Know how much money you make. Know how much is being taken out and why it is being taken out.

Teller v. ATM

If you work with us at The Finance Coach, you know that we usually recommend that you use cash for areas of your financial life that can involve discretionary spending (i.e. groceries, dining, entertainment, clothing…). This generally involves a trip to the bank on payday. I only use an ATM if I positively can not get to the bank before closing time or if a “TRUE” emergency arises and I need cash after hours. I like visiting the teller for many reasons; the first is that it forces me out of my comfort zone. I like people but I am an introvert. There are times that I have to force myself to have contact with people. This also allows me to get to know the employees of the bank and for the bank to get to know me. If I ever need a favor, the bank is more likely to go that extra mile to help me if they know me. Another benefit is that I can get my money in the denominations that fit my budget ($20, $10, $5…) if I went to the ATM I would only get $20.

Manual payments v. Automatic payments

I prefer manually paying over automatic payments. With manual payments, you can still take advantage of online bill pay, especially if your bank offers free online bill pay. I know this may take an extra half hour each month, but I want to be sure I have the money when I send my payments. With auto pay, they take the money on a specified date every month, whether the funds are available or not.

Automatic savings deposits v. Manual savings deposits

I know the argument, set it and forget it. The problem with automatic savings deposits is that the saver usually doesn’t forget it. They usually end up withdrawing the money. Be more intentional. Do your budget and see how much you want to put into savings and on what date. Then go online and make the transfer. You need to be intentional about saving money. Set a goal and go after that goal.

Automatic tithing v. Weekly giving in person

I know churches like the automatic tithing; it helps make sure they get the tithe. People often forget to give their tithe if they miss church on a given week. But that is more of a spiritual issue and the individual’s commitment and discipline to follow God’s instruction on tithing. Personally, I believe that you miss out on some of the enjoyment of giving your gift if it is not a conscious decision each week. God wants a cheerful giver. It is hard to be cheerful if we don’t even realize that giving is taking place. Make it intentional, experience the joy of giving each week. Another benefit to putting your tithe in the offering plate is that others will see you putting something in the plate. I don’t say this to bring attention to your giving or to gain praise or to say, “Look at me”. I believe this is important to the church membership. People need to see others enjoying this part of worship, your actions may convince a new believer (or even an old believer) to experience the blessings and enjoyment of tithing.

The tools of automation were designed to help us become efficient. Use the tools to simplify your financial life so that you can take bake control. If you would like help in simplifying your finances give us a call at 317-858-7270 or email me at coach@TheFinanceCoach.net.