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How to manage your money with a busy schedule

It’s hard to find the time to manage your money.

Life is busy and you never seem to have enough time to spend on things you want to do because you’re spending it on things you have to do.

Some of those things, like work, are unavoidable. You have to go to work to get paid. If you don’t get paid, you don’t eat. And eating is crucial.

And while we’d much rather spend it with friends and family, on our hobbies, or decompressing – we must focus on the things that move the needle.

Managing your money is important but it never feels like it’s crucial. It’s also time-consuming and stressful, which makes it even easier to put off.

What if I told you that you could be managing your money in a more efficient way? A better way that costs less time but is as effective?

When you think about it, the basics of money management are quite simple. Broadly, it’s concepts like spend less than you earn, invest the difference, and don’t commit to high fixed expenses. The specific steps are also well understood – ideas like monitoring your credit reports for errors, paying your bills on time, negotiating your expenses, etc.

The challenge is applying both the broad and the specific to your situation. That’s where it takes a lot of time but you can short circuit some of that by setting up a system that is easy to maintain.

If you pay your bills through a single checking account, it’s easier to monitor the spending. It’s easier to remember to negotiate bills because you see the bill payments each period.

So how do you set that up? Let me explain how I set up my system (which started as chaotic as you can get!) and you can steal what you want:

Map Out Your Money

The first step to map out your money and draw a financial network map. This is a drawing of all your accounts and their connections. The idea is simple but collecting all that information may take some time.

If your financial map is complex, don’t try to clean it up as you go. Don’t fall into that temptation. You want to get an accurate picture first. Stopping mid-way through the mapping process to close an account will be a distraction.

As you draw your map, you want to capture every account. Don’t skip ones that you don’t think are important – you want everything.

If it has anything to do with your money, it goes into this map.

It’s easy to remember credit cards, bank accounts, and third-party processors like Paypal or peer to peer payment services like Venmo. Don’t forget insurance policies (they have value!) or your utilities or other payees. If it touches your money in any way, it goes on the map.

This will be important in the next step because you often pay many of these services from a single account. If you decide to close that account, you need to reconnect with another account. The financial map will tell you all this.

Simplify Your Finances

I remember when I drew my first financial map. It was a mess.

I was young so I had a ton of online bank accounts to chase the best interest rates. I had too many credit cards because I was trying to get all those bonus offers. And drawing it all out was a painful experience but a very valuable one.

Financial stress comes in many forms but complexity only adds to the stress. It’s like trying to find something on a desk that’s cluttered with junk.

As with a messy desk, you need to clean up your finances too. Once you’ve drawn the map, it’s time to pare away the sections that are no longer necessary.

The most barebones financial system has:

  • Checking and savings account, preferably an online high-interest savings account,
  • Brokerage account, for both retirement and taxable investments,
  • Cash back credit card

You can have a couple checking and savings accounts, a couple of brokerage accounts, and several credit cards; that’s normal.

But the more accounts you add, the more complex the system is and harder to manage.

Pare down the accounts to as close to the bare bones as possible. Each remaining account needs a good reason. (in the case of credit cards, stop using them rather than canceling for credit score purposes)

I had several online savings accounts because I was chasing interest rates. I closed all but two online savings accounts (Capital One 360 and Ally Bank). I kept my Capital One 360 because I liked being able to create multiple savings goals quickly and Ally Bank because that’s my main checking account too.

By closing the accounts I didn’t need, I simplified more than just my financial system. I reduced what I needed to remember in my head and I received fewer 1099-INT tax forms! It was infuriating to get a tax form for $12.56 and having to fill it out on my taxes!

Automate as much as possible

Once you’ve simplified your money system, start automating the boring stuff you do every month. We all know we can automate our bill payment and retirement savings.

We also know that mundane tasks like budgeting can be accomplished by tools like Quicken or one of its alternatives. But setting them up costs a lot of time up front even if it saves you a lot down the road.

Once you’ve simplified your finances and set in (relative) stone the accounts you’re keeping – it’s time to automate the payment of your bills. There’s no reason you need to go in each month to schedule the payments.

And to protect yourself, get a good savings account that has free overdraft protection. I use Ally Bank and they have a completely free overdraft transfer service. If your checking account goes below $0, they automatically transfer money from my savings account in $100 increments. You just need to make sure you don’t run afoul of the 6 transfer rule for savings accounts (that’s a Federal Reserve rule).

Carve out time for a check-in

Every month, I check in on my money. It’s a good practice to get into because it’s easy to get trapped focusing on the day to day. The once a month check-in process makes sure I don’t lose track of the big picture. It also helps me check for fraud, which is rare but always seems to strike when you’re least prepared to handle it!

I track my net worth once a month and enter my figures into an Excel spreadsheet. It’s a process that helps me get closer to our money because we have bill payments and fund transfers happening without our direct intervention.

My spreadsheet is nothing fancy. It’s a list of all my accounts and their balances. I sum them up together and subtract any liabilities to get my net worth. Nothing fancy but it’s enough to make sure I’m on top of things.

Your finances don’t need to take a lot of time or be complicated. Complicated doesn’t necessarily mean better.

And you can manage it in a few minutes a month, spending the rest of that time doing things you actually enjoy!

Today’s guest post comes to you from Jim Wang. Jim Wang has been writing about money for over ten years and runs the personal finance blog Wallet Hacks, where he shares his strategies and tactics for getting ahead financially and in life. He isn’t a trained financial “expert” but a former software engineer, working in the defense industry before starting a personal finance blog that enabled him to quit his full-time job. This outsider’s perspective helps him understand complicated subjects and be able to explain them to regular people in plain English. He lives in Maryland with his lovely wife and three kids. 

3 Comments

  1. Xrayvsn
    Xrayvsn March 13, 2019

    Mapping out all your finances is crucial because until you get the big picture you cannot accurately assess if you are following you desired asset allocation or the goals of your investment policy statement.

    Online aggregators like Personal Capital really help me keep track of everything under one roof and simplifies all my calculations for me.

    • FullTimeFinance
      FullTimeFinance March 13, 2019

      I agree. I tend to use excel though, stuck in the stone age I guess.

  2. Abigail @ipickuppennies
    Abigail @ipickuppennies March 16, 2019

    Huh, I never thought about mapping out my finances before. I guess that could be helpful, though I think I’ve got everything about as pared down as I’m comfortable getting it. I still have to close my Capital One 360 accounts officially (transferred all the money out of them to Ally), which will simplify things a lot.

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