The Power of Payroll Automation and How It Can Transform Your Personal Finances

Managing your money can feel like a full-time job. Trying to track loan payments, purchase groceries, pay bills, and save money. What if you could set it all on autopilot?

That’s where payroll automation comes in. Payroll automation is such a game changer when it comes to your personal finances. Let’s dive into why it might be one of the smartest financial decisions you ever make.

Payroll automation means automating what happens to your income once you get paid instead of manually transferring money to pay bills each week, bi-weekly, or monthly.

 

How to do it?

  1. Download and/or print out a direct deposit form, (you can find URW’s direct deposit form on our website) and give it to your HR department to send your direct deposit to your financial institution, preferably, your favorite credit union, URW.
  2. Set up your automated transfers within your credit union and schedule payments and bills based off your pay schedule.

The Benefits?

  1. Build Better Financial Habits – Automatically
    The best to stick to good habits is to make them effortless. By automating savings and investments, you follow the “pay yourself first” rule without even thinking about it.
  2. Save Time and Mental Energy
    No more logging into multiple apps or setting reminder to pay bills. Automation will handle these routine transactions for you.
  3. Never Miss a Payment
    Avoid late fees and other missed due dates that can negatively impact your credit score. This way with automated payroll your loan payments are always on time and can help you stay on track.
  4. Smooth Out Cash Flow
    When you set up automatic payroll based on your pay schedule, you can budget much easier based on needs, wants, and savings.
  5. Grow Your Money Fast
    When you automate your payroll, you can ensure that a portion of each paycheck goes straight into your savings or retirement account.
  6. Reduce Human Error
    Manual transfers and payments can lead to mistakes such as sending too much, too little, or forgetting altogether. Automation helps removes that risk and ensures that everything you have planned goes according to plan.
  7. Peace of Mind
    One of best benefits of payroll automation is peace of mind. Automation leads to fewer decisions and less stress. Your financial goals run on autopilot, giving you confidence that your money is always moving in the direct you want it to.

 

I wanted to provide a quick example of how you could automate your payroll based off of your income. Let’s say you make $5000/month and you were paid monthly. You could set your pay schedule based off of percentages.

  • 25% may get taken out for taxes which should be deducted automatically. ($1250)
  • 6% for 401k to invest for retirement. ($300)
  • 4% for individual savings ($200)
  • 30% for mortgage or rent. ($1500)
  • 10% for a car payment. ($500)
  • 15% for insurance and utilities. ($750)
  • 10% for food ($500)

This is a good sample to go by to use as a budgeting tool and automate all of these things using payroll automation. The taxes and 401k should be deducted automatically by your company. The rest should be set up to deducted as soon as your payroll hits your account. The mortgage and loans should be deducted next automatically, then savings to pay yourself first. Then insurance and anything left over is fun money and will help you stay on budget.

 

Zachary Potojecki

Zachary Potojecki