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The Money Diaries: The 30-something Scrooge member who’s starting to automate his finances

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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.

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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.

To be featured anonymously in a future Money Diary, click here.

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43 Comments

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  1. Your tip about looking at monthly subscriptions makes a real difference. After taking a hard look at what I watch on TV, I decided to try canceling my cable. I saved over $80 a month, which is now part of my “entertainment” budget, and haven’t missed it at all.

  2. Wow, this sounds a lot like my situation. We are starting to automate our finances, but I keep wanting to pay off what we can as soon as the paychecks come in and not wait for the automated deductions. Baby steps though, I have our bank automatically send payments that we used to write a check for every month (mortgage & cars). That helps a lot and saves the cost of the supplies!

  3. I am waiting to automate until my consumer debt has been paid off. Right now, I have a couple of bills that are paid automatically – and I worry more about those than I do about the ones that I have to go in and pay manually.

  4. You live in the Houston area. Housing costs are super low there so that’s good.
    You do a good job with automatically investing some of your paycheck and automating a lot of your regular bills. And I like the sub-accounts at ING.
    However, dude, your food costs are KILLING you. I saw over $170 spent this week on grocery-related food alone (grocery stores + butcher). Check out day 2 and day 3, look how many times you visit the grocery store.
    Your coffee addiction is not bad. You like coffee. If you feel the same way about food, then by all means spend a bunch on groceries. But after going on a “weekly” grocery run, you go back twice more, then later get that stuff from the butcher (yes the pork will last a while but still…).
    I bet if you added up all you spend on lunches out with coworkers you’d be shocked. It’s in the 2-3 thousand per year range.
    Finally, your credit card interest is killing you! Why not divert some of that extra paycheck to paying off the credit card completely? 12% interest on that thing is a lot.

    Sounds like you are getting your financial life back on track and you’re doing a lot of good stuff. Those were the things that stood out to me. I think you’d really benefit from keeping track of every expense; this one week sounds pretty eye-opening for you. You’ll be surprised how much $15 here, $25 there on food can add up to! I struggle with that every month.

  5. Really enjoy this series. It’s great to see people realize how much less stressful personal finance can be once we get it together. Being able to buy an espresso machine without any guilt because you’ve prioritized and saved for it is much more rewarding than sticking it on a credit card.

    Thanks.

  6. I should really do one of these even if it’s just for myself. I only recently signed up for Mint and looking at my past spending makes me seriously consider buying a gun and a single bullet sometimes (Currently trying to fix 4 or 5 years of bad spending and 0 savings). I’m only 22 so I’ve got that whole “long haul” thing to look forward to, but it’s maddening now that I didn’t learn about this stuff sooner.

  7. Hm, this may be a really stupid comment but is $103.08 for a monthly electricity bill normal for the area/size home this person lives in? I don’t think I’ve ever paid more than $40 for an electricity bill, though of course I don’t live in a house.

  8. I really enjoy these entries. I liked his reflection a lot, too, because it’s showing the process working on his brain. Makes me want to sign up for Scrooge Strategies, too bad my account is in the red right now.

  9. i have read alot about doing something like this to take better control of my spending but i dont know why i have been procrastinating it. i think it was because i never saw anyone do it. thats the end of that excuse. so i will either do it or look for another :). seems really helpful

  10. I understand why you eat out with your new job. You’re getting semi-regular free lunches, and when you do bring your lunch it has to sit a day in the fridge….yum. It’s pretty easy to rationalize large lunch expenses when other lunches are free. I got around this mentality by thinking of the money wasted when I didn’t eat my lunch, as well as the health benefits of eating my own lunch instead of greasy restaurant food. You can gradually increase the brown-bag lunches until you’ve hit 3 or 4 times a week. You can also try eating something bigger for breakfast–an apple and granola bar wouldn’t hold me over too long.

    Depending on the frequency of the mowers, it may be an expense that you can live without. I personally wouldn’t want to spend $35.36 2x or 3x per month for something I could do easily. If you think you don’t have time, try reducing your food shopping trips by planning your weekly meals.

    I would see if you can divert the $60/mo (as well as all extra cash) towards the credit card debt. Even 3x the minimum payment can be a small fraction of the overall bill.

    Good luck.

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