Pennywise

Some ideas about managing money. Or, rather, some of the things I think work...

Disclaimer: none of these are original ideas. Well, original in the sense that I came up with them for myself, after having tried several options, but not original in the sense that I'm sure I'm not the first one to come up with them.

Money Manager

I actually barely do any of the thinking with my money. I use a manager app to help me keep track of what I have and what I need to spend.

I start with a list of every bill I have to pay no matter the frequency: monthly utilities/rent, monthly phone bill, monthly subscription to streaming service, annual cost of app/service membership, etc. Then I make a list of all of my income dates, which are usually just regularly scheduled pay-days. With both lists, I can easily see which bill has to be paid from each paycheck. You can even set up a spreadsheet to do highlighting for you or something. (I do.)

I use an app that lets me track outgoing and incoming money, like a digital checkbook. I recommend Volkron Checkbook or My Expenses. These are handy apps that let you track all of your bank account balances and enter transactions as money goes in and out so you always know how much you have. *But the key here is to put in future expenses, too!*

Every time I get a payroll deposit, I open the app to add the deposit and balance everything that's happened so far to get an accurate total of how much money I have. Then I take the list of bills and look at everything that will need to be paid up until I get the next deposit, and enter all of those. The app will calculate how much money I have left and I know I can spend up to that amount on other things until the next payday with the confidence that all the bills are already covered.

The other key is to pull out the app every time you make a purchase, so your balance is always accurate. Just because the app has ear-marked the money for an upcoming bill doesn't mean you can't accidentally spend what's in the bank account reserved for it. (The app might tell you there's $1000 left to spend, but the bank tells you there's $1500. You don't want to go making a $600 purchase and spend money set-aside for a bill!)

Sneaky Savings

Another thing I do is hide money from myself. I have several savings accounts, some of which are interest bearing, and a portion of every deposit gets spread across them all. The important part: exclude these accounts from the total shown to you by the checkbook app. You don't want to walk around thinking you have that money or else you'll find a way to spend it instead of saving it.

You can even do this with cash by having a stash somewhere and just “forgetting about it” until it's payday-time to put more cash in it.

Wouldn't you get more interest if you kept one large balance in a single account? Well, yes that's technically true. However, the reason I don't do that is because the psychological difference (for me, at least) between seeing one large balance and lots of little balances makes it less likely for me to be tempted to dip into it.

If you set aside $100 in total, but it only looks like 4, small $20 balances and some cash somewhere, you might not be as tempted to touch it.

Creative Investing

I know, I already talked about having extra money for savings, which is rare enough on it's own. Now I'm suggesting a portfolio!? The idea here is to get your money to work for you, even if it's just the little bit you can spare. Investing less means less gain potential, true, but some is better than none.

For example, I like to play with Crypto. Buy some crypto while it's low, sell it when it's high, profit. (Ok, there's actually way more to it than that, but this is the gist.) You can do the same thing with stocks.

But there's actually a lot more you can do with crypto, as well. You can lend it out with interest, put it in trading bots that will automatically buy/sell based on rules you give them, and even put them in “savings-account” type programs that have yield. Some trading services will have these options and do many of them for you automagically.

Granted, I'm working with less than $50 on all of these, so I'm making $1-$3 every few weeks at the most, but it's still more money than I had, and it'll increase the more I invest so long as the markets behave. I'm trying to say: it's a cheap way to squeeze a little extra out.

Remember: investing of any kind carries risk. Play at your own speed.

I play low-investment with low risk options so I'm making “low” profit, but that's just because of the amount of money I have, amount I can spare, and amount I can afford to lose. I treat all of these additional savings accounts: a small portion gets added to them with each deposit, so my portfolio is constantly growing.

Bottom Line

  1. Keep track of where you are by using an app to help be your accountant.
  2. Squirrel-away funds as you can so you have a nice surprise for later.
    • The more you spread it out, the harder it will be to give into using it.
  3. Find small ways to make your money grow, even if it's just a little.

I don't pretend to be some guru with novel ideas, but I found some things that work for me and figured I'd write about them.