Tuesday, 5 December 2017

My Strongest Money Tip





Hi folks

As a recovering consumerist, the urge to spend is a deep-seated craving that I know will never go away. So, what is my most powerful weapon against mindless emotionally-fueled spending? Well here's the thing - it is not discipline, it is not will-power, it is not meditation, it is not giving it all to Mrs HM to manage, it is not a budget per se or indeed anything rational.

The answer for me is most definitely  - Automation.

Yep. Automation, with the very kind help of some banking technology.


Our friends the possums eating the veggie scraps on the back
verandah at night. I know they are a bit pesty, but.....cute.


So, I have realised that I spend the least when I touch money less frequently and when I do not have any money on me to actually spend.....spoken like a true 'holic. Thus I have stopped touching or interacting with my money for the most part and with great effect. I have automated every single necessary bill payment and savings transfer and I only have a small set amount on a separate card to mess with fortnightly (even that is off limits due to my recent spend-nothing challenge).


Corned beef hot from the slow cooker with white sauce
made from scratch.


How I Automate My Money

Immediately after my fortnightly salary drops into my bank accounts (usually in the wee hours of every Thursday fortnight) it gets allocated out as required via automatic deductions that I have set up via my internet banking or by direct debits - I touch nothing.

1. A set amount auto-transfers to my bills accounts (which has no card access)
2. Set average amounts get Bpay'd off to utility companies and the like from my bills account
3. Direct debits for other bills and expenses have been organised to all occur on that same Thursday
4. Savings and investment amounts get whisked off via automatic deductions to untouchable HIBA's and investment accounts
5. $40 goes to my personal spending key card to last me a fortnight (this is the only money I can justifiably access). This key card is a stand-alone account linked to no other sources of money. Once that $40 is gone, it's gone old chap! Uh huh.

So in any given fortnight, out of my entire senior manager's pay packet I only get to see and use $40 personally - even that small amount can sometimes light the fires of the inner demon spend-a-holic.


The local carols, youth concert and jazz evening in the park.


Automation means all my bills are paid in advance before I get them, investments and savings happen while I sleep, payday is a non-event and the evil Smaug lies undisturbed within my poor tired mind.

I think automating your money might be worth trying - even in part maybe?

I know the cash envelope system works brilliantly for many folks....but not for me.  I have given it a red-hot try and cash is like a nightmare for me.


Take care folks and stay nice

Mr HM (Phil)

22 comments:

  1. I do the same. As soon as my salary is deposited, automatically money goes to different savings accounts. I prefer the convenience of not having to carry cash, so I use my credit card for groceries and pay the bill fully each month. All bills are paid automatically as well.

    I hope your no spend week is going well.

    ReplyDelete
    Replies
    1. I now have dispensed with my big portfolio wallet (necessary when hauling cash around) and now have a tiny card holder instead that holds my Opal card, drivers license and key card only.

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  2. So true. If I have available money with me I lose willpower and am more likely to spend. I use electronic banking to move it around. If I had cash in an envelope It would be too tempting at weak moments.

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    Replies
    1. I had hoped that one day I would be able to carry a wad of cash around with zero temptation....I'm light years off being that person I'm afraid!

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  3. Another great post Phil - Automation is not just for spenders though, it is for lazy savers like us.

    We automate deposits into our bill account, christmas club and ING accounts as we are lazy, lazy savers.

    All our bills are by direct deposit, including our credit card as again we would forget to pay it on time otherwise.

    Our superannuation is a defined benefit so thankfully we don't have to worry about that at this time.


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    1. You sound like a kindred spirit KellieL !!

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  4. Wow, that really is complete automation. But what a sane decision if it keeps you out of trouble. I'm the same with food - if there are treats in the house I will want them, even after 30 plus years on a wholefoods, healthy diet. If they are not in the house I rarely think of them, and will cook up something delicious and satisfying if I get a craving.

    Glad you have a bit of play money for yourself, we do that here too.

    Madeleine.x

    ReplyDelete
    Replies
    1. Oh I hear you about treats in the house - same! Actually, for me it is bread....if there is bread in the house I will just keep eating it till it is gone. Sigh.

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    2. It's hard being human, isn't it?!

      Madeleine.x

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  5. Wow, you sure are strict! I googled Smaug...lol

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    Replies
    1. I'm strict because I have goals to kick after a lifetime of squandering.

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  6. I can’t use cash either, I spend it too quickly.
    My answer to cash envelopes is to use a number of sub accounts and transfer into them each fortnight. This has been working well for us and I simply leave my grocery money in my account, for some reason it doesn’t get spent as quickly as cash would.
    I like the idea of having utilities direct debited and will look at setting it up.
    Melissa

    ReplyDelete
    Replies
    1. We do that with grocery money too which also has its own dedicated card

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  7. Thank you for this post, Phil. I've been wondering for weeks about your spending rule "spend 10% of your income as you please". That seemed such a high percentage to me unless it would include work lunch. $20 a week, however, is really frugal, wow. All the best, Sandra

    ReplyDelete
    Replies
    1. Oh, I still am a full believer in the 10% spend as you please.....this is all that stuff that makes life lovely but is genuine not a need. The $20 allowance is part of that 10%. The types of things that the 10% cover are reasonable purchases that honestly cannot be allocated as a base need .... e.g. brand tea instead of no-name, quality meat instead of cheap sausages, better quality shoes instead of cheap and nasty plastic versions...you get my drift.

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  8. I don't allow myself 'cash' in my wallet as I won't use my card for small amounts, like a cake or chai latte, so by not having cash, I don't spend. Cheers Lyndie

    ReplyDelete
    Replies
    1. Exactly Lyndie....you understand what it is like then

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  9. couldn't agree more.
    the envelope system was a nightmare for me too, ended up spending more than i had; pay day i sit here at the pc & i do my banking myself, into their various accounts goes; rates; car; visa (debit); vets; loan; birthdays (still give my adult kids money for their day); saver (house money/for any needs); it is the best system ever for me; CentrePay (Centrelink) pay my utilities straight out of my pay before i get it. it's not fool proof but atm it's working.
    great post
    thanx for sharing

    ReplyDelete
    Replies
    1. Yes, certainly not fool-proof but a zillion times better than cash....and safer too.

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  10. Another good post, Phil. I've tried the envelope system a few times and always find it a bit confusing. Most of our monthly bills get paid automatically but I think we could do more especially with savings. Part of the reason for our recent move was that we were able to become debt free and we want to keep it that way! Saving for retirement has taken priority. Thanks to blogs like yours, we have lots of ideas and inspiration.

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  11. For me i found the best way personally was to stay happily at home ( i am retired) and out of the shops , have no junk mail coming in the mailbox, have a "meh" attitude towards advertisements on TV, Living simply and minimally and keeping my mind busy on creative things like gardening and handwork. I do my grocery shopping online as it not only makes me a more savvy shopper by not being tempted but i also do not have to walk past the shops in the Mall to get to the supermarket.

    ReplyDelete
    Replies
    1. Perfect! This is EXACTLY the type of life I want to live once I have retired too. Your comment is very motivational Karen.

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