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

Ramit Sethi

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 learning from the Ultimate Guide to Personal Finance. 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.

* * *

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.: 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.: 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 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.

* * *

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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  1. Mark C. Webster

    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. cukamunger

    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. Honey

    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. JoeK

    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. Stephen

    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.


  6. Dave

    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. Rosa

    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. 2dogcasa

    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. kenyantykoon

    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. joruva

    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.

    • Lesli e sign up today to make some extra cash.

  11. Vas

    Good luck to the guy keeping this diary. I think he will be in a much better position in future by keeping tabs like he is although it’s such a tedious and time consuming process to follow that I cant see myself following it for too long.

  12. Lance

    I just wanted to reply to the comment “Also realized that we are living paycheck to paycheck – even though we have enough income/money in the bank not to”. I live paycheck to paycheck on purpose. I put as much money into savings/401k as possible which helps to keep me on track with my budget. I have found that if I have excessive money in my checking account I have a tendency to spend it. I can still buy what I want with the money I save but I specifically save for that item over the course of time (ING accounts). I have found that this has kept me from buying several things that I thought I really wanted at the time but after saving for a couple months realized I didn’t really need.

    • Lesli e

  13. Rachel

    In the South and SW, electric bills are killer in the summer. I’m in central AZ in a 750sf duplex and my bill hit $200 this summer. My parents always top 300. I’m obsessed with unplugging and turning off everything I can, but when the outdoor temp stays in the 90s overnight and is well over 100 all day for up to four months, you can kiss a low electric bill goodbye. But when winter comes and my friends in New England are complaining about there high heating gas costs, I am looking at maybe $30 a month for electric since I don’t have to use the heater all winter. Its all about trade offs.

  14. Oleg Mokhov

    Hey Ramit,

    Frugality + automation = financial freedom and abundance.

    As this Money Diary demonstrates, by ruthlessly cutting out what’s not important and putting the newly-freed resources into what is important (ie. being frugal), you get financial maximization.

    You have the freedom to spend on what you really want without having to worry about if you can afford it, and the automated personal finance system means you have the time to enjoy it.

    Looking forward to the next Money Diary,

  15. Scott

    My problem lies with the automation process itself. If I were to automate my house payment that would cost an extra $10 per month, automate electric payment $5, Water $5, gas $5. Instead of wasting $25 on unnecessary fees because the utilities companies are too cheap to let me automate, I just pay the bills when they come in.

    Another problem is with the ING, I’d love to do subaccounts, but ING generally doesn’t pay as high an interest rate as my savings, I have a spreadsheet that I keep, but it gets a little cumbersome.

    • Ramit Sethi

      Scott, how much more does your bank pay than ING? How much would automation / less cumbersome accounts be worth to you?

    • Lesli e

  16. Moneymonk

    Something tells me this guy lives in Houston, key words =Randall’s, Kroger and Galleria, LOL


    “Net cash result to checking after 401k, savings, discount stock plan, credit card payments, mid-month mortgage payment, etc = +$1858.20.”

    Nice! Not sure where his problem lies

    He is paying the mortgage, credit cards and socking money away to 401k and savings and still have a chunk left over.

    Enjoy your money, eat out, have a little fun.

    He also has sub accts for miscellanous spending, such as HOA and ins. Nice~

  17. Gen Y Investor

    This guy seems to be doing a good job with his financial situation. He does seem to spend a lot on lunches and food, but everyone has their areas where they like to splurge.

    As for the automation debate… I can see the benefits of automating aspects of ones finances; however in my case I feel like it would make me too lazy. I like looking at my bills and accounts before I pay them and or move money around to make sure everything is up to snuff. If everything is automated and there’s an error it would be annoying to fix. Just my opinion.

  18. Angela

    @Ramit- What pops in your head when people say they like looking at their bills and automating would make them lazy?

    • Ramit Sethi

      They don’t know what they’re talking about

  19. Credit Card Chaser

    “As for the automation debate… I can see the benefits of automating aspects of ones finances; however in my case I feel like it would make me too lazy.”

    @ Gen Y Investor

    What?! 🙂

    When you start automating your finances then it simply means that you can use your time to do other more worthwhile things instead of rote manual entry managing bills… it doesn’t mean that you must instead use that time to lay around on the coach all day and be lazy… 🙂

  20. Concojones

    @Gen Y Investor: I automate anything that can be automated, but I still check the activity in my account once a month. So, is automation making me lazy? I’d rather say that managing my finances is costing me less time.

    @the diarist: I recommend getting some idea of what you spend in different categories per month, extrapolate per year, and then decide whether you’re OK with what you see (*). Maybe you’ll decide to shift the grand for TV subscription towards entertainment/travel, as one of the previous posters did.
    (*) This only takes a few minutes each month if your expenses are all done with a card (auto-logged), and cash expenses are limited to one category (in my case: bars, going out, …) so those are auto-logged too (ATM cash withdrawals).

  21. Gen Y Investor

    I have nothing against automation. It’s just I’d rather review everything and catch potential problems with bills and accounts before I send my money to a giant company. It’s not fun dealing with large companies and trying to get credited for a mistake they make. To me it’s worth 30 seconds of my time to review the bill and ensure its accurate before paying it.

    • Ramit Sethi

      Gen Y Investor: I appreciate the comment. Just to correct the idea that automation means you won’t be able to see bills before they get sent: The automation system in I describe in my book lets you review EVERY bill before anything happens. The difference is that, by default, bills get sent if you do nothing. So it makes up for our lack of willpower, busy schedule, being out of town, etc, and handles things the correct way by default. You can always review bills before they’re paid.

  22. Scott

    It depends on what interest rates are at, summer 2007 I was at 6.25%, I believe ING was around 5%, now I’m at 1.5% ING is at 1.3%, not as big of a difference anymore, but might not be worth the hassle of changing.

    Honestly, not automating isn’t that cumbersome, it takes me 5 minutes to fire off a check to any given place, big expenses like mortgage I almost prefer non-automated since if I have a really bad month, I might not have the $ in my account, especially now since my wife went back to school and we’re living on basically just my measly income. I would prefer to automate all my bills to my credit card so I can make one payment per month, but many places charge an extra 3% or $5 to pay with a card, the stupid ones charge regardless (Natural Gas charges no matter what if you pay online, same with mortgage).

    If I was busier (ie making more money) I’d automate more, as it is, I’ll save a few bucks and do it myself.

  23. Jason

    Cable is a big one. I just called and had them lower my bill to the “new special promo” they are offering to new subscribers. I kept the same service, just saved $50 mo.!!

  24. Jill

    Scott, my online checking (free with direct deposit) lets me set up automatic monthly payments at the credit union’s end rather than going through a mortgage or utility company’s site to automate payments at some extra cost.

    And, after dealing with the country’s most incompetent post office outside metro Chicago, I also love knowing that my payments actually are getting to the electric company and such in a timely electronic manner.

  25. prufock

    I like these diaries, but this one sort of sounds like a plant. Yes, we should all read the Scrooge Strategy and cancel our unused subscriptions! We’ll save a fortune! Well, except for those of us who aren’t foolish enough to HAVE 4 unused online gaming subscriptions. It’s this part of IWTYTBR that I can’t connect with, maybe because I’ve pretty much always been conscious of where my money is going. Having recurring charges that you aren’t getting any use out of just seems irresponsible to me. Don’t get me wrong, I’m sure I have my irresponsible moments too.

    Other than that this was an okay read. He spends a lot, but seems to have an income to support it. Some of the expenses seem excessive to me (he does eat out a lot), and he’d probably be wise to create some sort of plan, but he’s paying into savings and retirement first and foremost, he has an emergency fund, and he seems to be doing all right.

    • Ramit Sethi

      Yeah, I understand. These Money Diaries can’t connect with everyone, but I assure you it’s not a plant. Personally, I’ve had many, many subscriptions where I wasn’t getting the full value out of them (some for over $100/month…that’s what prompted me to create the A La Carte Method). Good comment. Thanks for leaving it.

  26. Sara

    I’m confused by his statement in the bulleted section where he says they are living paycheck to paycheck. Above that when he receives his paycheck he says: “Net cash result to checking after 401k, savings, discount stock plan, credit card payments, mid-month mortgage payment, etc = +$1858.20.” If he is putting money into savings (not to mention having money to invest in stock plans and retirement accounts), he’s not living paycheck-to-paycheck. He also says he “typically” puts 25% in savings from windfalls, like the almost-$5K he receives from the employee stock plan.

    Can the OP explain this?

    Also, while he technically has the income to support his habits… he also still has credit card debt (I think – he says he pays 3x the minimum payment, which doesn’t sound like he’s paying it off each month). I’m unopposed to conscious spending on stuff that’s important to you, but his eating out, grocery, and latte bills are pretty excessive for someone who had debt at 20% interest. It sounds like he could buckle down and pay that shit off in like 6 months. Maybe it’s on zero percent interest credit cards? Are those still around?

  27. Neil Nehrer

    Does anyone know anything about a regulation preventing more than six withdrawals a month from you savings account? I received an email today from ING stating

    “Based on recent activity in your Orange Savings Account™, we want to remind you that you cannot make more than six withdrawals from your account each month. This is a federal regulation that all banks are required to follow for savings accounts like this one, so if this type of activity occurs more than three times in any 12-month period, we will have to close your account.”

    How am I supposed to automate my savings if they are going to close my account if I make too many transfers? I’m super-pissed about this government interference in my finances.

    • Ramit Sethi

      Yeah Neil, it’s a legit government regulation, and it completely sucks. Remember, though, this is for SAVINGS accounts. You can do whatever you want for checking accounts, which is how my system works (by centering transfers from your checking). So while it’s unfortunate for having 6+ sub-savings accounts, you can basically still workaround this.

  28. prufock

    Don’t worry, I wasn’t making an accusation 🙂 I can believe this is the real deal, and he sounds like a good student.

  29. Neil Nehrer

    Thanks for your reply Ramit, it does completely suck. I might have over-reacted but when I saw that email I could have strangled the nearest government employee :-). Thanks for the great site.

  30. Buppie

    I think it would be helpful if people posted their state or metro area – just to give readers a sense for the cost of living and what’s normal.

    I think automation can be great, but I prefer to do it on the bank side and not on the side of the company where the bill is going. Many of them require that you make any changes 1-2 weeks in advance and for those juggling debt (student loans, mortgages, credit cards, etc.) making those changes in advance even if it’s to increase your payment is annoying and the bank route tends to offer more flexibility. I usually use my bank’s free online bill pay so that I can retain control even if the payment’s automated.

    Ramit, I love the money diaries. I’d like to see a young professional couple profiled – especially folks with kids. Plus, I’d like to see some advice about dealing with eating out, which seems to be an Achilles heal for so many.

    • Ramit Sethi

      Buppie, a Money Diaries about a young couple is a GREAT idea. If you’re willing to do one (and it’s good), I’ll post it. Email me with details.

      Also, I have 1 or 2 extremely detailed posts on saving money on eating out in my Scrooge Strategy.

  31. Arkad

    This is a great day in the life take on running personal finances. Now that I’ve advanced a few levels by going back to steady work (after bouncing from ad hoc and tenuous set ups since December(!)), I’m more conscious of the way I spend and make money. It’s inspiring to see others improving their lives through finances. Onward!

  32. Chris bautista

    How about a money diaries entry from someone outside the US?

    Would really love to see how people around the world try to work out their finances.


  33. nick

    Am living in Paris, so could potentially do an international money diary entry. Imagine it would be similar to someone living in NYC. All my bills are automated although personal checks are still quite common in France. Have not found any French blogs on personal finances, so I assume they’re not as interested in such things. Lots of food and wine blogs though…

  34. Joes Money

    Loved the read. Thanks!