Want to create your own set-it-and-forget-it wealth machine? Let us take a closer look on how to automate your savings and investment the right way:

Define Your Financial Goals
It’s important to be clear before you automate what are the things you are saving and investing for. Are you creating a safety net? Saving for a down payment? Planning for retirement? A dream vacation? Having your objectives well-defined will drive you, if you want a purpose, and decide the amount you will need to save. Set monthly or weekly contributions instead of setting yearly targets.

Choose the Right Accounts
For your automatic transfers, you will require certain accounts.

For Savings:

HYSA — Great place for your emergency fund, money for short-to-medium-term goals. Unlike typical checking accounts, HYSA interest rates are higher, allowing your funds to compound faster while remaining liquid. Be vigilant about searching for online banks, as they generally tend to provide the highest rates and no monthly fees.
For Investments:

Retirement Accounts (401k, 403b, TSP): If your employer has a retirement plan, this is usually the first stop. Automating savings with your employer-contributions are most often taken out of your paycheck before it reaches your bank account, truly the gold standard of automation. In addition, a lot of employers provide matching contribution – free money that you really shouldn’t just leave laying on the table!

Individual Retirement Accounts (IRAs): A Roth IRA or Traditional IRA lets you save for retirement on your own. You can automate transferring money straight from your checking account to the IRA provider of your choice (for example, a company like Vanguard, Fidelity or Charles Schwab).

Brokerage Account: An excellent option for non-retirement long-term goals, a taxable brokerage account. Set up automatic investments in ETFs, mutual funds or stock.

Robo-Advisors: Services such as Betterment or Wealthfront take over your entire investment process. You specify your objectives and appetite for risk, and they do the rest: creating and rebalancing your portfolio and investing your money automatically — often for a tiny fee. A great option for beginners.

Pay Yourself First — Schedule Automatic Transfers
And herein lies the otherwise missing cornerstone of automation. When you receive your salary, immediately transfer a percentage of your earnings to savings and investment accounts.

Via Your Employer: If you can manage it, have a portion of your paycheck directly deposited into your 401k or other employer-sponsored retirement plan. In fact, some employers will permit you to slice your direct deposit, processing some of your pay right to a savings account at another bank.

Through Automated Transfers from Your Primary Checking Account: Schedule monthly automatic transfers from your main checking account to your HYSA, IRA, or brokerage account. Plan these transfers to occur the day following each of your pay days (e.g., when you get paid). All of them accrue over time — even if it is only a small amount, consistently. Begin with a manageable amount that fits your budget, this could be $25, $50 or even $200 per pay period. You can always raise it later.

Set up Automatic Bill and Debt Payments
Automating Bill Payments (Not Savings / Investment per se but still I have added here). Automating Bills helps to ensure that you never miss a payment, which protects your credit score and fees for late payment.

Many regular bills are the same amount every month, so set up automatic payments for all of them: rent/mortgage, utilities, loan payments, credit card minimums and subscriptions.

If you’re aggressively paying off debt with double figure interest rates, set up an automatic payment for your minimum and then schedule another automatic payment for any extra amount you want to apply to the principal.