Some ideas are simple. But…
While this idea is very simple, it is surprising how many people do not take advantage of it. Small, even tiny, steps can add up.
As much as possible, I time my payments, such as for utilities, credit cards, etc., so I have the most flexibility.
When I have a payment due, I will schedule it to be paid after the next expected deposit, if at all possible. For example, if a due date for a bill falls within the window of time when I know I will be receiving some income, I schedule the payment to be done after the deposit is expected.
While this is not always possible, in many cases it is. Doing so increases any “financial buffer” I may have. I avoid running my checking account down such that I wonder if something will bounce. By scheduling well, I have more breathing room and the bill still gets paid within an acceptable window of time.
Bill Shenanigans
I also pay attention to the appropriate time to pay. I have one utility that has conflicting information on the bill. On the front of the bill it states “Payable on receipt”, expecting customers to pay the bill when the bill is received. However, on the back of the bill it clearly states that interest will be charged if the bill is not paid by the end of the billing period. This means to me that I have until the start of the next billing period to pay without penalty. As the billing period is two months, after the bill arrives I have an extra month to pay, and so I schedule payment after the following month’s income deposit which is before that end of the billing period.
Cards
By knowing credit cards’ “closing dates”, I have some flexibility of scheduling debt payments. Namely, when I about to use a card to pay for a purchase, assuming I have more than one card available, I can use the card whose closing date is later. This can give me a few days or weeks of extra time before payment is due on the card itself.
Juggling payments could bite me if I mess up, so I try to be judicious in use of this method. And I always pay a card before its due date, so as to avoid any interest charges,
Checking checking
Everyone has their own method of money management, so mine is simply mine alone. I have no judgment on anyone else’s method. When I receive a bill, I immediately schedule it to be paid using my bank’s bill pay system. And I deduct the amount from my register’s balance immediately. This is despite my scheduling payments for a few weeks later. This way I am always aware of my obligations and won’t ever be surprised or caught short.
Dollars and Cents
To reduce time I need to pay attention to minor details, and avoid arithmetic errors, when I deduct expenses in my checkbook register, I round the amount to the nearest dollar. Namely, if a bill is for example $45.61, I will write 45.61 for the entry, but I will round up to 46.00 for purposes of determining my new balance. So for items with 50 cents or greater, I round up to the next dollar, and for items 49 cents or less I round down to the dollar amount. This method may save a few seconds, but also has the added benefit of alleviating common arithmetic errors that could arise by attempting to manage down to the penny. Of course, this means that my balance is not exactly to the penny compared to what the bank says is in my account, but it is close enough.
What other simple small steps do you do to manage money? Let me know here.
“Hamarikyu Park” is a woodblock print made in 1931 by Kawakami Sumio, one of eighth artists included in “One Hundred Views of New Tokyo (woodcut series)” (日本語: 新東京百景), showing views of Tokyo as it was rebuilt after the 1923 Great Kanto Earthquake.
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