The Money Diaries: The 30-something Scrooge member who’s starting to automate his finances
Today is another post in the Money Diaries series, which is based off New York Magazine’s Sex Diaries. We’ve collected stories from real people about their spending habits over seven days, anonymized them, and posted them here.
This week’s post is by a 36-year-old IT professional who describes himself as a “fledgling financial connoisseur.” He’s still working out the kinks to automating his finances and actively implementing my Scrooge Strategy tips. Read on to see how he’s doing — and notice how there’s a transition period between not managing your money and getting it fully automated.
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Day 1
5:50 a.m.: Wake up and check email. Notification that EZTag has automatically charged $40 to my check card. Also see email reminders for electric bill and gas bill (~$219 and ~$26), but they are both due in 2 weeks, well after my next paycheck. $40.
6:45 a.m.: Arrive at work and eat breakfast – a granola bar and apple that I brought from home. Since I eat lunch out almost every day, I try to at least bring my breakfast.
11:40 a.m.: The work crew wants to go to the local Thai buffet for lunch. $12 including tip.
3:50 p.m.: Get roped into going to a work social for a few drinks after work. $20 including tip.
6:40 p.m.: Fill the gas tank up on the way home from the work social. $31.08
6:50 p.m.: Check mail when I get home. Totally unexpected bill from the radiologist for $231.34. I’ll have to remember to phone my oncologist and/or insurance provider next week to find out why this portion wasn’t covered by my “100% plan” health insurance, especially since the procedure was “covered” by a copay. I expect the run around, but thankfully we have an emergency fund setup just for this type of thing.
7:45 p.m.: Make our grocery list for tomorrow. It’s decidedly thin, since we spent so much for 4th of July weekend. Net cash outlay for day 1: $103.08. Looking forward to the upcoming weekend, we usually spend less money than during the week.
Day 2
7:45 a.m.: Arrive at work, get invited to breakfast. I had already eaten my apple and granola bar so passed on breakfast, but joined them and had a coffee instead. $1.86
10:40 a.m.: Receive email that my company’s semi-annual employee discount stock distribution has been deposited to my stock account. +$4495.39 available for withdrawal once it clears. Need to discuss with my wife how we want to distribute the proceeds (typically we put 25% in savings, 50% towards debt, and reserve 25% for “guilt-free spending.” I really regret not contributing the maximum allowed for the full enrollment period.
11:30 a.m.: Go to lunch at a local dive. Had a jalapeno/cheese chicken sandwhich. $10 including tip.
2:30 p.m.: Login to ING to initiate a distribution from my Homeowners Association and Car Insurance subaccounts. Both are due by the end of the month. $61o and $450. Will fire off payments once it clears and I receive the invoice for my car insurance.
5:45 p.m.: Go to the mall to exchange some drinking glasses that we bought a couple of weeks ago for a different color. End up getting +$3.65 cash back for the exchange.
5:55 p.m.: Buy an espresso from Starbucks on the way out of the mall. $2
6:45 p.m.: Weekly grocery shopping trip. We shop at a different Kroger than normal this week since it was on the way home from the mall. End up seeing some friends and get asked out for dinner. Kroger was out of my wife’s favorite yogurt, I’ll have to remember to pick up some tomorrow. Somehow our “thin” grocery list still cost $68.26.
8 p.m.: Dinner with friends at a sushi bar/Chinese restaurant. $26 including tip. Net cash outlay for day 2: $104.47.
Day 3
8:25 a.m.: Head to my parents to help them go grocery shopping. Stop at Starbucks for a coffee. $2
11:30 a.m.: Go to Whole Foods for lunch and a few things. $28.61
12:45 p.m.: Wife goes to Sally Beauty Supply to pick up a few cosmetics. $14.38
4 p.m.: Head to Randalls to pick up produce and some ice cream. $22.36
7:15 p.m.: Go to Kroger to get the yogurt they were sold out of yesterday. $2
7:25 p.m.: Pick up an espresso on the way home. $2
10:22 p.m.: Read “Scrooge Strategy: Save hundreds by not spending money in the first place” email. Discuss with my wife. We cancel 4 online gaming subscriptions that we haven’t used in months, and decide to open an ING subaccount to save for a really nice espresso machine (and pertinent accessories) to satiate my espresso habit. Net result: $60/month extra go into savings instead of paying for something we don’t use, and in a few months we’ll have a nice espresso machine out of the deal. Awesome. Net cash outlay for day 3: $71.35.
Day 4
Took our little doggie to the dogpark, but otherwise stayed home. Cooked all our meals at home. No cash expenses today, yay! Net cash outlay for day 4: $0.
Day 5
7:30 a.m.: Breakfast courtesy of work – new team moved to our floor (they closed down another office location and merged the two) so they had a catered continental breakfast. $0
11:45 a.m.: Lunch crew met a former colleague at Berryhill Baja Grill for fish tacos and seafood burritos. Lunch comped as a business meeting. $0
4:55 p.m.: Filled up the gas tank again. $30.06
7:45 p.m.: Mowers finally show up to mow/trim/weed the lawn. They’ll charge me tomorrow for their services tonight. Net cash outlay for day 5: $30.06
Day 6
7:45 a.m.: Regular breakfast at work (apple & granola bar). $0
9:15 a.m.: Receive lawn services invoice & receipt via email. $35.36 after taxes.
11:30 a.m.: Kung pao shrimp at local Chinese restaurant. $8 including tip.
2:00 p.m.: Pay July car payment. $322
2:05 p.m.: Tomorrow is payday so I pay extra on the credit card bill – 3x monthly minimum. $100
4:45 p.m.: Meet my brother at Buffalo Wild Wings for a few drinks after work. $22 including tip.
8:45 p.m.: Wife and I go to the local butcher to stock up on pork baby back ribs & pork tenderloin which is on sale. Get 4 racks of ribs (and a few other things), and a rain check on the pork tenderloin. $51.78 total.
9:07 p.m.: Login to checking account and see that my ING withdrawal has cleared. +$1060. Will pay homeowners association tomorrow. Still waiting on semi-annual insurance invoice so I can pay that… Net cash outlay for day 6: $539.14
Day 7
5:00 a.m.: Woke up early. Breakfast at home, and fix lunch to take to work.
6:25 a.m.: Arrive at work. It’s Payday! Login to my bank account, credit accounts, savings accounts, etc to make sure my “automatic savings plan” and “automatic payments” all cleared. Net cash result to checking after 401k, savings, discount stock plan, credit card payments, mid-month mortgage payment, etc = +$1858.20.
11:00 a.m.: Lunch is catered due to an event on my floor, so my lunch sits in the fridge. Free lunch = rule.
10:00 a.m.: Receive email from Scrooge Strategy that my credit card was declined. Update billing info to reflect new card as the previous one expired. $8
12:30 p.m.: Pop over to the Godiva store at the Galleria to pick up some chocolates as a surprise for my wife. $15.70
2 p.m.: Remember to call about the medical bill I received last week. Turns out it’s legit. Because the new “medical plan fiscal year” just started, I haven’t yet cleared my deductible for out of network services. I’ll have to pull out the $231.34 from my emergency fund for this unexpected expense, and also setup an “Unexpected Medical Expenses” subaccount on ING for this type of thing.
6 p.m.: Try to login to homeowners association website to pay HOA bill, but it’s down for maintenance. Will try again tomorrow. Net cash income for day 7: +$1834.50
In Sum
Net income for the week was $986.40 to checking (stock deposit notwithstanding). However there are still a lot of outstanding bills (gas, electricity, cell phone, cable/internet) that need to be paid, plus living expenses for the next 2.5 weeks until next payday. Thoughts about this experience:
- Damn, I eat out a lot. Stark contrast to my previous job when I only ate out maybe once a month because I couldn’t afford it…
- Damn, I pay to drink a lot of espresso/coffee! After reading Scrooge Strategy and deciding to cancel a few unused subscriptions, it really was a no-brainer what to save for. Hah!
- This experiment made me realize that while my finances are fairly automated, there is still room for improvement. Still, being the fledgling financial connoisseur that I am, I still like a lot of hands on especially when it comes to paying for non-credit card bills. There have been too many instances where the bill doesn’t match the services rendered for me to trust automatically paying them. Plus, by manually paying them, it forces me to realize and accept said services on a monthly basis – and to feel the financial impact first hand.
- Also realized that we are living paycheck to paycheck – even though we have enough income/money in the bank not to. We’ll have to discuss this and see if we need to realign our financial strategy. Reading my diary comments like “but they are both due in 2 weeks, well after my next paycheck” make me realize that either we aren’t saving enough or aren’t proactive enough in paying bills (or both.)
- Poignant comment my wife made when we were discussing our ING accounts a couple of nights ago (when we setup the espresso subaccount): “We have $350 saved for that dresser already? Why didn’t we start this years ago? We should do this for ALL major purchases!”
- Reviewing my money diary for the past week really has made me realize just how much I’ve changed due to I Will Teach You To Be Rich. Thanks, Ramit.
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Note from Ramit:
This is a pretty good example of someone who’s starting to pay attention to his finances. Notice the transition period between “not paying attention” and “automating finances” — it requires more attention for a few weeks, which is a big enough barrier that most people don’t do this for their entire lives. But if you do it, you don’t have to worry about the day-to-day logistics for the rest of your life.
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. seems really helpful
