Author Topic: What is your monthly money system?  (Read 5562 times)

fallstoclimb

  • Handlebar Stache
  • *****
  • Posts: 1084
What is your monthly money system?
« on: August 13, 2014, 11:23:58 AM »
You know, like how you manage the timing of money in your checking account and paying bills - especially for those of you who do most of your spending on credit cards and then pay them in full each month.

For years we had a pretty good little system set up:

1. DH and I both got paid on the same biweekly schedule
2. I had an allotment siphoned off from my paycheck that put 50% of the mortgage +the minimum student loan payments into a dedicated checking account that autopaid those 2 bills
3. Our first paychecks of the month would go to a loan overpayment, sometimes holding back a little if we anticipated an unusually high credit card bill
4. Our second paychecks would go to paying off the credit card bill (which typically posted just around the same time we got our paychecks -- never due until the next month, but we paid if off immediately). 


But now I have several changes coming down the pike:
1.  Loans are paid off (!!!!!) so our first paychecks are freed up
2.  We just opened a second credit card for the travel rewards that will probably be on a different cycle than the first one -- I imagine our spending will be irregularly spread across the two cards now
3.  We will increase our pretax retirement savings to the point where the first months paychecks won't cover credit card spending -- we will have to combine the power of all take-home pay


I guess the obvious answer is just, don't spend much from any of the paychecks and at the end of the month pay off the credit cards, but does anyone have a more elegant system?  I like to set as much to auto-pay as possible, but have never found a way to successfully autopay credit cards since the bill varies and requires some active surveillance.

tyd450

  • Bristles
  • ***
  • Posts: 327
Re: What is your monthly money system?
« Reply #1 on: August 13, 2014, 11:42:45 AM »
I set up a little system and have a cashflow spreadsheet to keep it on track every month.  Both of our paychecks go into the same checking account.  The mortgage, 429, electric, all are auto paid out of this account.  Everything else we pay on credit cards.  ATM cash withdrawals also come out of this account.

Our mortgage is about $2k per month and I make sure our balance never dips below 2k so that is my buffer.

We both are paid on the 15th and last day of the month.  Mortgage comes out on the 1st.  I basically wait until we are both paid on the 15th, then I go pay off all credit cards.  Then I see what is left and transfer the excess above my $2k buffer info savings/investments.

      
            
            
            

senecando

  • Bristles
  • ***
  • Posts: 482
  • Age: 30
  • Location: Madison, Wi
Re: What is your monthly money system?
« Reply #2 on: August 13, 2014, 11:47:43 AM »
I guess the obvious answer is just, don't spend much from any of the paychecks and at the end of the month pay off the credit cards, but does anyone have a more elegant system?  I like to set as much to auto-pay as possible, but have never found a way to successfully autopay credit cards since the bill varies and requires some active surveillance.

I've gotten Chase and BOFA cards to automatically withdraw the correct amount. What kind of cards are you using?

The 'surveillance' comes when I periodically balance the books in YNAB.

Fuyu

  • 5 O'Clock Shadow
  • *
  • Posts: 58
  • Age: 29
Re: What is your monthly money system?
« Reply #3 on: August 13, 2014, 11:48:06 AM »

2.  We just opened a second credit card for the travel rewards that will probably be on a different cycle than the first one -- I imagine our spending will be irregularly spread across the two cards now


Have you tried changing the payment due date for your credit cards? I change all of my credit cards to the 22nd of each month so it was easier for me to keep track.

I get paid twice a month on 16th and the last day of each month. I get my paycheck deposited directly into my savings account.

On the 16th day of each month, I do the following calculation

Current Balance                                                        110
Desired ending balance                                           -150
Credit card payment due this month                        -300
Amount needed to transfer from savings account     340

On the last day of the month, I do the following calculation
Current Balance                                                      150
Desired ending balance                                         -150
Estimated cash withdrawals in next month            -40
Rent Payment                                                        -600
Amount needed to transfer from savings account 640
« Last Edit: August 13, 2014, 11:58:44 AM by Fuyu »

tyd450

  • Bristles
  • ***
  • Posts: 327
Re: What is your monthly money system?
« Reply #4 on: August 13, 2014, 12:05:25 PM »
I made all of mine due on the 1st of the month and then I will just pay off all total balances once our paychecks deposit on the 15th the month prior.  It gives you some breathing room.


2.  We just opened a second credit card for the travel rewards that will probably be on a different cycle than the first one -- I imagine our spending will be irregularly spread across the two cards now


Have you tried changing the payment due date for your credit cards? I change all of my credit cards to the 22nd of each month so it was easier for me to keep track.

I get paid twice a month on 16th and the last day of each month. I get my paycheck deposited directly into my savings account.

On the 16th day of each month, I do the following calculation

Current Balance                                                        110
Desired ending balance                                           -150
Credit card payment due this month                        -300
Amount needed to transfer from savings account     340

On the last day of the month, I do the following calculation
Current Balance                                                      150
Desired ending balance                                         -150
Estimated cash withdrawals in next month            -40
Rent Payment                                                        -600
Amount needed to transfer from savings account 640

fallstoclimb

  • Handlebar Stache
  • *****
  • Posts: 1084
Re: What is your monthly money system?
« Reply #5 on: August 13, 2014, 12:06:49 PM »
I've gotten Chase and BOFA cards to automatically withdraw the correct amount. What kind of cards are you using?

The 'surveillance' comes when I periodically balance the books in YNAB.


Well, I meant more so making sure I had enough in my accounts to cover whatever the bills are, since they vary fairly substantially and I have to make the dates all work out, but....


2.  We just opened a second credit card for the travel rewards that will probably be on a different cycle than the first one -- I imagine our spending will be irregularly spread across the two cards now


Have you tried changing the payment due date for your credit cards? I change all of my credit cards to the 22nd of each month so it was easier for me to keep track.


...I didn't know you could do this!!!

bo_knows

  • Pencil Stache
  • ****
  • Posts: 819
  • Age: 38
  • Location: Fairfax, VA, USA
    • The Crowdsourced FIRE simulator
Re: What is your monthly money system?
« Reply #6 on: August 13, 2014, 12:31:08 PM »
Our system is:

- Wife gets paid twice a month, I get paid every 2 weeks.
- All income goes into 1 checking account
- 95% of all spending goes on an American Express rewards card
- Each week, 1/4 of our mortgage payment gets moved to a 2nd "mortgage transfer" checking account.
- Once a month, Roth IRA contributions are automatically taken from our main checking account
- Once a month, the Amex is paid from the main checking account.
- On the 1st of the month, the mortgage is automatically paid from the mortgage transfer account. (For whatever reason, I personally like to have the mortgage money sectioned off).
- At the end of any given month, I use mint.com to calculate our net savings increase (income - spending). The difference is then moved into whatever "extra" investment we're doing at the time (dumping into savings account for a large purchase, sending money to vanguard brokerage, etc)

jabba

  • 5 O'Clock Shadow
  • *
  • Posts: 9
Re: What is your monthly money system?
« Reply #7 on: August 13, 2014, 01:13:55 PM »
I figure out all my monthly bills, all my bi-monthly bills, 6-month bills and yearly bills (so, all expenses - mortgage, insurances, etc.) and annualize it all so that I have a certain total monthly number. So something like an insurance bill for $360 that is due every 6 months adds $60/month to my monthly expense number. I have my paycheck direct-depsosited into one account and all of my bills are auto-paid out of this account. I have it down pretty close to reality. I don't carry a debit card for this account or anything and instead have a separate "spending" account, which gets a set amount transferred to it from the main account every month and this is used for various things when credit cards aren't convenient. Credit cards are set to auto-pay in full from the spending account. That main account is essentially an escrow account for myself. To get the proper expense number and make sure it is accurate, I regularly look at the past 12 months of power and gas bills and average them out, so if my gas bill is $70 in the winter and $10 in the summer, but averages out to $50, then $50/month goes into the account. I check in every few days to make sure everything is going smoothly. I also have two savings accounts that get auto-paid as if they were bills, one for emergency fund and one for "house expenses".

I still check in on all the accounts pretty regularly, but feel like things are pretty close to auto-pilot, I'm not really moving money around much manually. It's helpful to get a set amount in the spending account every month and that's the account I manage most actively. It's really helpful to only really look at that one account as being the one I have to budget for. Seeing $2k in the main account two days before an $1800 bill is paid makes me think psychologically that I have more money than I really do. Seeing $400 in my spending account and knowing that if I blow it all, worst case I'm not eating, but my mortgage and utilities and bills and savings and retirement contributions etc. are all on track.

minimustache1985

  • Stubble
  • **
  • Posts: 248
Re: What is your monthly money system?
« Reply #8 on: August 13, 2014, 01:40:39 PM »
I keep a month of expenses in my checking account specifically so I don't have to wait for paychecks to come in to pay my bills.

I pay my credit cards in full on the second Tuesday of each month (and use an Outlook calendar reminder).  HOA and term life insurance are autopay from checking, and then I schedule the mortgage later in the month in case I decide to put a different amount of extra principal on it.

H is more old fashioned and pays his credit card, utilities on whatever day they arrive in the mail except for his term life and the rental mortgage which are on autopay.

We're in the process of combining things (we do have all our accounts on Mint and think of it all as ours) so this system may be changing soon as H has expressed interest in me coordinating our accounts, and I'll probably still pay everything but our mortgage on the second Tuesday of every month or on autopay.

BigRed

  • Stubble
  • **
  • Posts: 200
  • Age: 44
  • Location: NJ
Re: What is your monthly money system?
« Reply #9 on: August 13, 2014, 01:54:59 PM »
All our income gets deposited in the checking account.  Everything gets tracked in YNAB.  When a credit card bill comes, I enter the scheduled withdrawal into the register for the scheduled date.  Investments are scheduled automatically and entered into the register well ahead of time.  I keep the working balance of the checking account above $5,000 or so.  If it gets above that, I transfer money into the savings account (we're saving for a house down payment, otherwise that transfer would be to investments, I guess).

Maybe that's more surveillance than you want?

Shor

  • Bristles
  • ***
  • Posts: 480
  • Location: Orange County, CA, USA
Re: What is your monthly money system?
« Reply #10 on: August 13, 2014, 02:00:46 PM »
I keep the emergency buffer in the checking account: $6k which fluctuates based on the day of the month.
Salary direct deposits in the checking, car loan direct withdrawls.
Bills go to credit cards. Credit cards auto pull full amount from the checking.

Target monthly savings amount gets moved from checking to investment accounts each month (with discretion on balance vs proximity to rent pay): IRA till full then B (taxable).

I don't actually know what the smaller bill amounts are until I look it up for the roommate's split of the rent.
I really don't pay any mind to it since the incoming cash flow >> outgoing.

Beric01

  • Handlebar Stache
  • *****
  • Posts: 1156
  • Age: 30
  • Location: SF Bay Area
  • Law-abiding cyclist
Re: What is your monthly money system?
« Reply #11 on: August 13, 2014, 02:07:16 PM »
Most of my bills auto-pay each month from my checking. I keep enough money in my checking to cover a little more than one month's bills. Everything left over I deposit into my investment accounts.

I could automate everything 100%, but I actually like doing a bit of manual work at this point, since I'm still relatively new to the working world in general. Perhaps in a couple years when I have all of my expenses locked down I'll switch to full automation. But keeping my assessment allocation constant between my 401k, Roth IRA, and taxable account does require a bit of manual work each month.

BooksAreNerdy

  • Bristles
  • ***
  • Posts: 257
Re: What is your monthly money system?
« Reply #12 on: August 13, 2014, 03:04:40 PM »
YNAB

Thegoblinchief

  • Guest
Re: What is your monthly money system?
« Reply #13 on: August 13, 2014, 03:20:03 PM »
All income and bills go into and out of the same checking account. Whatever is left at the end of the month gets put towards savings/debt goals, which vary based on our progress.

With all but the weirdest of months, a $1,000 buffer is enough for us, but if I know we had an abnormally expensive month, I'll transfer additional money back from our online savings account.

Runge

  • Stubble
  • **
  • Posts: 219
  • Location: TX
Re: What is your monthly money system?
« Reply #14 on: August 13, 2014, 04:02:28 PM »
YNAB

Agreed. I implement YNAB's "Rule 4" which states that you live on last month's income, not this month's.

The concept is simple. The money you earn in this month is earmarked as only available next month. So it's essentially like I get paid a full month's income on the 1st of each month to cover all of my expenses for that month. The budget makes sure that I don't double count money.

tyd450

  • Bristles
  • ***
  • Posts: 327
Re: What is your monthly money system?
« Reply #15 on: August 13, 2014, 04:59:07 PM »
I just downloaded YNAB and watch an introductory video.  I can already tell it is going to completely change the way i think about money and budgeting and spending.

Paul der Krake

  • Magnum Stache
  • ******
  • Posts: 4861
  • Age: 12
  • Location: UTC-10:00
Re: What is your monthly money system?
« Reply #16 on: August 13, 2014, 05:10:52 PM »
I don't trust auto-payments, never have, never will. I have one day each month when bills get paid and all accounts reviewed for discrepancies. It takes me less than an hour and I know for sure where I stand.

Zikoris

  • Magnum Stache
  • ******
  • Posts: 3702
  • Age: 33
  • Location: Vancouver, BC
  • Vancouverstachian
Re: What is your monthly money system?
« Reply #17 on: August 13, 2014, 05:19:38 PM »
We put all our spending on joint credit cards, which I track in Mint. I manually add in rare cash transactions. Recurring bills are all set to auto-pay on credit cards.

On the 15th, we go through transactions line by line and fully pay off our individual items and our half of joint items. Boyfriend e-transfers me his half of the rent, since they don't accept credit card payments.

On the last day of the month we do the second set of payouts - again, line by line, we each pay off our items and half of joint items, in full.

For excess money, I always have a general idea what I need to keep in my bank account to cover my credit cards, and just put the extra amount into investments every payday. Boyfriend does a larger deposit into his investments every month or two, since for him it involves writing a cheque, going to the bank, etc (mine is all online).