Money Management

Monthly Money Flow

I find it interesting to see how people “handle” their money. I’m not talking about how people “manage” their money (by investing in stocks, buying real estate, etc.) I’m talking about how people actually deposit their paychecks, move money between various accounts, and spend their cash. Here’s an “inside look” at how my money “flows throughout the month”.

At the first of the month, I deposit my wife’s paycheck at our local bank. (Neither of our jobs offer automatic deposit.) I deposit the check and get half-a-month’s worth of cash. I then go home and pay ALL of our monthly bills. I also login to our online savings account and schedule a withdrawal of 1/3 of our monthly “savings goal”. I like to leave a comfortable amount of money in our primary checking so I don’t transfer every “extra” dollar.

About two weeks into the month, I deposit my paycheck. I deposit the check and get the second half of the month’s cash. I go home, login to my online savings account, and withdraw 1/3 of our monthly “savings goal”. Next, I login to my brokerage account and withdraw my monthly “investment goal” amount.

Near the end of the month, I analyze my situation. If I need a little “extra” money for “life stuff”, I refrain from withdrawing the rest of my savings goal. If I don’t need any extra money, I withdraw the remaining 1/3 of my savings goal amount.

At the end of the month, I “sweep” all of the money that is left in my checking account (minus a $100 “cushion”) into my online savings account and/or my brokerage account.

Side note: If I did NOT pay ALL of my bills on the first day of the month and instead I paid them all when they were actually “due”, I could earn a few more dollars in interest. But, I feel so much better knowing that all of my bills have been PAID! Peace of mind ROCKS!

There are two “bills” which I pay with cash or check. We pay for daycare and our daughter’s gymnastics classes on a weekly, not monthly, basis. These two amounts come out of “my” paycheck.

9 thoughts on “Monthly Money Flow

  1. 1st: Paycheck direct deposit into Citibank eSavings
    5th: Transfer 50% into Vanguard Money Market
    14th: Transfer 40% from Citibank eSavings to Citibank Checking
    17th: Tranfer 25% from Vanguard MMF to Vanguard investment funds
    17th: Transfer 40% from Citibank Checking to non-Vanguard investments
    20th: Transfer needed amounts from Citibank eSavings to Citibank Checking to pay bills
    25th: Review Citibank eSavings and Vanguard MMF — target pyramid of $200 checking, $2K Citibank eSavings, $20K Vanguard MMF and everything else in investment portfolio.

  2. Living overseas, I transfer 40% of my takehome back to the States to pay down my credit card, pay down a personal loan, pay my parents and cover various expenses that are paid out of that account (renter’s insurance, etc).
    I get paid once a month on the 27th. On the 28th, I have standing orders for the transfers to the States (I also send a little bit back for a savings account) and for my rent (another 40% of my take home), so by the end of the day on the 28th, 80% of my take home is already out of my account. The remaining 20% covers landline, cell phone, utilities, groceries and everything else. Some months it’s enough, some months I go into the automatic overdraft. Automatic because it’s automatically paid back when money is put into the account. I pay all my bills as they come in unless I’m already overdrawn and then I wait for my next paycheck and live very, very carefully. Bills here are always net 30 days minimum (some are 45, others are 60) so there’s usually some wiggle room. It’s not ideal, but it’s a living for now. Once this debt is paid off, I will be saving like a madwoman and will be able to say things like 20% to T.Rowe Price, IRA fully funded, saving for a house, bought some bonds, etc… Maybe by this Autumn. Three times a year, I get some extra money for an after school activity I run. That goes into a separate savings account here, but I think this time, I will ship it back to the U.S. for debt repayment. i’m almost finished with the personal loan. I’m hoping two months on the outside, maybe sooner and then it all goes to Visa.

  3. I get paid once a month. On payday my check is direct-deposited into my personal discretionary checking account and a series of automatic recurring transfers happen:
    – $3,000 to our joint checking account
    – $400 to my personal “bills” checking account
    – $120 to my personal ING savings account

    The remaining $400 stays in my personal checking account as “walking around money” for the month (I manipulated my retirement contributions so that my take-home pay is $4,000. Because I’m a geek.) Then I usually go to the ATM and withdraw $100 — $20 for me and $80 to pay my piano teacher for the month’s lessons.

    Our joint account pays for our mortgage, utilities, groceries, etc. My “bills” account is where I pay for my car, my cell phone, clothes, etc. I pay for my medical expenses with a debit card for my FSA. I use online billpay for everyone who’ll take it. Anything left in the discretionary account at the end of the month goes into the ING savings.

    I also have a Vanguard account for my emergency fund and retirement and a Paypal account that is also discretionary.

    Good question!

  4. I have direct deposit. I get paid twice a month. On payday I sit down and plug all the numbers into my budget spreadsheet. Some of the things I budget for originally had a higher amount so I keep the budget amount at that number but record what I actually pay so I know how much extra I have. Savings transfers are included in my budget.

    I pay all the bills I have slotted to be paid for with that check on payday, regardless of when they are due (which means they are early). On my way to work I pull out cash for food and gas, they go in different parts of my wallet so I know how much I have for what. Although towards the end of the pay period if one has money left over and the other needs it I tend to take from it.

    Any leftover cash in my wallet on the next payday goes into a box that I set aside for payperiods when I run short of food/gas money. It’s also doubling as my ‘visit friends who live 3 hours away’ fund. Once it reaches $50 then I’ll go visit my friends and be able to pay for gas and one dinner out.

    One of my checks always has extra money in it, but it’s a different amount every month because it’s based on how many extra on call nights I work the month before. I have a list of ‘extra’ stuff that I need to cover that month, like birthday gifts. Once that extra list is gone through the rest of the money goes to savings or to pay on debt.

    I also have a part time job that pays me weekly by check. That check I deposit every Tuesday along with any other extra money I might have acquired during the week (babysitting, surveys, etc) and it gets transferred either to savings or to pay on debt. Out of sight, out of mind. Only in the bank long enough to be transferred out.

  5. I also get direct deposit twice a month.

    The first half of the month contains one set of bills, car insurance, internet, groceries

    The second half (and these are all scheduled on the pay days) is my car payment and phone bill.

    I have three auto-transfers, $100 to my ING savings, $60 to my Christmas fund, and $200 into my regular savings. I keep the regular savings at $500, for immediate emergencies that I need transfered into my checking. Once it’s at the $500, I put $200/month into my ING instead.

    I don’t carry cash, I really should start, but I hardly ever go out to eat, and the only time I need my card is for gas.

    All of my payments are done online, except for Car payment, which is done via check because otherwise they charge $8 to pay online (Thanks Capital One).

    If I have a decent amount of extra money forcasted in MS Money for the month, I’ll pay extra on my car payment. Once it’s paid off, I’ll still pay myself car payments but directly into my savings.

    And I keep track of it all in MS Money so I know how much is leftover in my checking in case my father needs money for his prescriptions.

    This was kinda sporadic 🙂

  6. I get paid 1st and 15th. $1000 of each check goes into the household account (which has a one paycheck ‘cushion’ in it). An additional $150 per check goes into the savings account linked to the household account for property tax, insurance and other ‘accrual’ bills that only come due once or twice a year (also vet bills, etc that are sporadic.) The remainder of my pay goes into my ‘personal’ checking account – this includes overtime.

    First of the month – pay all bills that are in hand (water bill isn’t always here). Most are on autodraft and I’m trying to set up the remainder as online banking.

    Mid month – pay water bill, auto debits for savings, new car/next house project fund and monthly Roth contribution transfered out to the appropriate accounts automatically.

    End of month – extra is swept into savings. I’m trying to get the accrual accounts to the point where they are funded for a rolling calendar year in advance.

    E fund is a combination of an ING account linked to the household account and laddered short term CDs at my credit union. These accounts are approaching a year of gross income, so I will probably be adding money to my retirement %; I’m a long way from maxed.

    Retirement is 401(k) pretax/not included in the number above.

    The money in my ‘personal’ account is eating out, hobbies, entertainment, clothes. If there’s money left in there (over the $100 cushion), it is swept into a linked savings at the end of the month for vacations. My bonus and any ‘found’ money is also deposited into the vacation account. Sometimes I divide this savings account into a vacation fund and ‘want to buy the next cool electronic gadget’ fund.

    Interesting to see how different people handle this, but the one thing I see in common is to make the process as ‘idiot proof’ as possible. Long gone are the days when I never knew when a bill was due!!!

  7. Thanks, Jennifer. I find that having a large cash cushion plus some non retirement investment, is very psychologicaly freeing. I call it the ‘go to hell’ fund. Knowing that I *can* quit my job means that I don’t feel trapped. Now, I probably *won’t* quit in the foreseeable future, but I *could*.

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