Monday, March 12, 2007
I am behind on everything.
I owe NCN a congratulatory shoutout.

I owe Michael and Jim posts.

I owe myself about four educational finance book reviews, because I owed the library a bunch of money to hang on to them. I have notes, just not posts.

Unfortunately, I also owe my bosses an article and some historical data reports this week. And meeting my deadlines for LAST week involved pushing those back. [sigh]

So I'll probably be MIA (er, more MIA than usual) this week.

But in response to English Major and NCN, here's a short rundown of my cashflow management.

I'll just get this out of the way: I force budget. So a LOT of category funding comes out of my pay via direct deposit.

I get paid biweekly, and base my "budget" on two pay periods per month. (For those months in which I have three, I do some different things which I'll explain below.)

  • Gross Pay: 100%
  • Automatic Pension Deduction <1%
  • 401(k) Style Plan 10%
  • Taxes 25%
  • Life Insurance, Health Insurance, and Flex Spending <3%
  • Charitable Deductions <1% (I REALLY need to improve this for next year.)
  • Savings Allotments: 9.9% (of which: 22% overdraft fund, 39% condo fund, 39% emergency fund. ETA: I've moved this to 14% overdraft, 43% condo, 43% efund, as I hit my $500 target for my overdraft fund. I'll sweep the extra from my overdraft fund to my efund periodically.)

So my net pay, the amount that actually hits my checking account, is about 51% of my gross.

On payday, I usually log in to each bank to check that everything was deposited properly. I move $15 from my overdraft fund to my vacation/holiday account (I can't get my HR system to do this automatically).

If it's the paycheck before the first of the month:

Over 90% goes to my rent. Whee. I'm left with around $100 for my renter's insurance bill and groceries for those two weeks.

If it's the paycheck in the middle of the month:

It covers EVERYTHING else. I make electronic payments either through automatic withdrawal or online billpay. My student loan payments come due at the end of the month (or the very beginning of the next month). My utility bills are due between the middle and end of the month. (My gas and cable/phone/internet bills don't vary by more than a dollar or so a month, so the only point of contention is my power bill [usually between $20 and $45].) My car insurance is due around the same time. My credit card bill is due the next month, but sometimes I'll send a partial payment early to make sure that I don't overestimate my reserve. (I always pay in full.)

This usually leaves me with $175-$225 in unemcumbered funds. From this I take care of food, gas, and entertainment. Most of this goes to food.

I manage, despite buying lunches as often as not, because:

  • I get a transportation subsidy from work that covers my bus and rail fare. So I only buy gas for personal trips.
  • I have a relative who works for a major cell phone carrier, so my cell phone bill is $10 a month.
  • I rarely buy alcohol. I enjoy the occasional drink, but I don't buy wine or liquor to bring home. If I'm out, I may buy ONE drink and then switch to water.
  • I rarely buy clothes. This is easier than it sounds because I hate everything. [grin] In all seriousness, I have fairly plain and sober taste in clothes, and most of what ends up in the stores doesn't tempt. When I do shop, I try to hit the sales or Tarjay.
  • I try to use coupons or visit the local second-run movie theater for my flick fixes.

I do have to restrain myself from buying tickets for a lot of concerts and club shows, however. And sometimes I'll find things a bit tight and focus a bit more on staple foods for a few days.

Finally, in those months (usually January and July) in which I have an extra pay period, a large portion usually goes to paying off travel/gift expenditures (my holiday fund doesn't cover everything), another piece goes toward savings, another piece goes toward extra debt repayment, and then I allow myself a little fun money (for clothes, shows, and such) with the rest.

It's not a perfect system. I do occasionally take money back from the overdraft fund to keep my checking balances in line (hence the name). But I keep my fingers out of my other savings pies, and my financial picture has steadily improved. So I think I'll stick with it.



Anonymous Jonathan said...

Thanks for sharing. It looks like a pretty good system that works for you.

How do you know what you have left during the month? Just a quick glance at the bank account?

Blogger HC said...


And as for your question, pretty much. Since my primary credit card, my overdraft fund and my checking account are all held by my credit union, I can simply log in and see all three at once.

To make sure of my remainder, I take my outstanding checking balance, subtract my credit card statement, then my bills (seen in billpay) and then my loan and insurance payments (which don't change from month to month). I may rerun that calculation a time or two more as charges hit my account, just to make sure I'm staying in line.

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