Update: There is now a 2-way tie for the most beautiful girl in the world. As we welcome our newest addition, posting will be lighter than usual for the next couple of weeks (years? decades?). Looks like early retirement might have to be pushed back a bit again…. totally worth it.
Infographic creation site Infogr.am recently gave the Best Data Story award (Data Journalism Awards 2014) to the interactive article In Climbing Income Ladder, Location Matters from the New York Times. Sometimes NYT articles have such a clean layout that you don’t even notice that many of the images and graphics can be manipulated and contain additional information.
For example, in the top graphic you can hover and find the specific value for the chance that a child raised in bottom-20% household will end up in a top-20% household. 6.9% in Austin, TX by the way, where I spent a significant part of my youth.
In the next graphic, you can actually toggle the value for parental income level. In Austin, you can see how the future income distribution changes from growing up in a 10th percentile household to a 90th percentile household.
Updated details, added new stores, and added our own experience. You’re gonna have a baby! Part of the whirlwind is deciding where to start your baby registry. Similar to wedding registries, you go to the store, pick up a bar code scanner, and simply zap everything you want to put onto your registry. They usually provide you a checklist so you don’t forget anything. You can also add and remove items on registry online, and track what items were bought.
Here are the results of my research after scouring the respective sites and reading various baby forums, comparing factors including selection, price, customer service, return policies, and completion discounts:
Babies R Us
- Pros: Large selection, registry works both in-store and online. Registry Rewards program where you get points when other people buy from your registry. You can return items to a physical store up to a year after arrival date, with certain restrictions (see below). In-store items on registry can be returned without receipt. Works with Shoprunner.
- Cons: Prices tend to be higher in general. Some items are online-only, and thus not available in stores. Online-only items can be returned to a physical store for store credit, but if they are mailed back then the refund credit goes to the original purchaser, not you. Also, such items require a gift receipt or online packing slip.
Completion Discount: Physical coupon arrives 6-8 weeks before stated arrival date. They mail you a 10% off coupon good for a one-time purchase (technically valid for one calendar day) that can include some or all of the remaining items on your registry, with some restrictions:
The completion offer is not valid on diapers, formula, furniture, “R”US Gift Cards, Special Orders, Buyer Protection Plan, Video Game Hardware, Kiddie Kandids and Motherhood Maternity merchandise. It is not valid on prior purchases.
Amazon.com Baby Registry
- Pros: Large selection, online-only. Competitive prices in general, plus no sales tax in many areas for now. Return policy offers a free prepaid return mailing label if you return the item in new and unopened condition within a year from date of delivery. You will get a gift certificate with the value (purchaser will not be notified). Also offers universal registry features if you want.
- Cons: Can’t return things to a physical store. For easy returns, items must be “sold by Amazon.com” and not a third-party seller. Otherwise, you are subject to the return policy of that specific seller. Of course, you probably didn’t buy the items so you have no control over this.
Completion Discount: You become eligible 30 days prior to stated arrival date, receiving 10% off a one-time order up to $5,000 worth of good from remaining items on registry. If you are an Amazon Mom member with Prime, you’ll get a 15% off completion discount instead. Applies only to items sold by Amazon.com, and only items that are deemed baby-related by Amazon are allowed.
Target Baby Registry
- Pros: Convenient for gift givers, lots of stores nationwide. Competitive prices in general. You can return or exchange any item on your registry in-store, with or without receipt. Will be easier to use up Target gift cards since they sell everything from toothpaste to furniture.
- Cons. In-store selection is more limited and varies by location.
Completion Discount: Physical coupon sent to you, activates after due date. Good for 10% off all remaining items either in-store or online, you can use it both online and offline as long as it’s the same day. (Some people report that the 10% coupon works on all items in that one purchase at Target, but I can’t confirm.)
Buy Buy Baby
- Pros: Very large selection, registry works both in-store and online. You can all return items to a physical store, even without receipt, for store credit. As this is the baby branch of Bed, Bath, and Beyond, you can use BBB 20% off coupons (sign-up online for mailing list to get coupons regularly). Overall better reviews from mommy forums regarding customer service.
- Cons: Limited store locations. Prices may be higher on average. However, Buy Buy Baby also does price-matching to online stores like Amazon (see below).
Do you price match items I find advertised for less at another website/retail store?
We will gladly match our direct competitors’ prices on identical items. Please call us at 1-800-436-3048 so a Customer Service Representative can assist you. Exceptions may apply.
Completion Discount: Valid after due date. 10% off all remaining items, you will receive both a physical coupon in the mail and a coupon code via e-mail, so make sure both are accurate. (Some people report that the 10% coupon works on all items, not just remaining items in registry. May vary by each store policy, similar to the acceptance of expired 20% off coupons.)
Here are some other baby registry alternatives:
Walmart Baby Registry was very basic. There is no special registry return policy, it’s just their standard gift return policy which means you’ll need a gift receipt. Without a gift receipt, you’ll be limited to a certain number of returns and be required to submit your driver’s license. There is no completion discount. Still, if you do most of your other shopping at Wal-mart as opposed to Target, it’s probably convenient to register here and be able to use any store credits or get gift cards from Wal-mart.
TheBump has a universal-style registry that lets you include items from Amazon, Buy Buy Baby, and several smaller retailers. I didn’t really want to deal with gifts coming from that many different retailers, all with their own unique return policies.
Wishpot is another universal registry that allows to add any item from any store online, and then people can “reserve” that item to give to you. A price comparison engine helps gift givers see where the item is the cheapest. Again, this method makes it difficult to return items as people may buy them from online stores that require you to arrange and pay for return shipping or have a gift receipt, or stores that you don’t have near you. It seems more focused on making things easier for the gift giver than the gift recipient.
BabyLi.st is another universal baby registry option. You can add items from any retailer (even sites like Etsy.com) or non-stuff like college tuition, dog-walking, or baby sitting hours. Again, this method makes it potentially difficult to return items but it appears that you can also choose the retailer you want it from (whether people will actually buy it from there is a separate question). They recently announced a 10% completion discount good at four stores: Diapers.com, Land of Nod, The Honest Company, and Giggle.
Our Baby Registry Experience
In the end, we decided to register at Babies R Us and the Amazon.com Baby Registry. We would have chosen Buy Buy Baby over Babies R Us, but there was no BBB near us. Babies R Us will work best for friends and family that prefer to browse and then buy something in a physical store. Amazon is more convenient for people that want to ship us something directly, but still has a good return policy for the most part. In the end, we were happy with the results. We used the completion discount from both Amazon and Bed Bath and Beyond without issue, but definitely bought more stuff from Amazon. We did return some duplicate things to Bed Bath and Beyond instead of mailing it back to Amazon, and it took us nearly a year to spend all the credit (mostly because we were too lazy to drive back out to the store and we tend to buy a lot of baby stuff used).
We decided to leave out Target for the sake of simplicity and did not regret it, although we have since bought lots of gifts for other expecting parents from Target.
Many people hire a financial advisor because they aren’t comfortable investing on their own, and they appreciate having an experienced person to talk to whenever they have any questions. However, this usually means paying at least 1% of your portfolio assets every year to that person. Especially given the current low interest rate environment, 1% is a huge number and could eat up a large percentage of future returns.
Vanguard has recently rolled out a new product called Vanguard Personal Advisor Services (PAS) where someone will work with you to create a financial plan, implement your portfolio for you, and be available to update and discuss that plan as needed. The minimum asset size is $100,000 and the cost is 0.3% of assets annually, which is much lower than the industry standard. As a DIY investor, I was interested in this service for my spouse in case I am somehow incapacitated one day. Here are my findings based on calling in as a customer to three different Vanguard reps and various online sources*. Anything quoted below is taken directly from this detailed Vanguard brochure [pdf].
Qualifications. You must have a minimum of $100,000 of investable cash or securities. Eligible accounts include individual accounts (including IRAs), joint accounts, and certain trust accounts. Note that 401(k) plan assets are not included.
Fees and costs. Vanguard PAS will charge you 30 basis points (0.30%) annually. Fees will be calculated quarterly and based on your average daily balance the prior calendar quarter. The fee will be calculated across all securities in the portfolio, with the exception of money market fund positions. This does not include the underlying expense ratios of any mutual funds or ETFs that you may own in the portfolio.
Annual Financial Plan and Personal Review. First, Vanguard will gather information from you via an online questionnaire (and telephone discussion if needed) in order to “understand your financial objectives, such as your age, specific financial goals, investment time horizon, current investments, tax status, other assets and sources of income, investment preferences, planned spending from the Portfolio, and your willingness to assume risk with the cash and securities being invested in the Portfolio.” They will focus on your specific goals, which can include planning for college, saving for a home, establishing a rainy-day fund, or saving for retirement. They will take into account things like Social Security, pensions, IRAs, 401(k) plans, and other investment accounts held outside of Vanguard.
Vanguard PAS will then create a draft financial plan for you based on this information, which you will discuss with a Certified Financial Planner (CFP) to finalize and approve. At least annually, your advisor will schedule another phone conference with you to see if there have been any changes in your “financial situation, other assets or sources of income, investment time horizon, investment objectives, planned spending from the Portfolio, or desired reasonable restrictions” that may require a new Financial Plan to be approved.
(Side note: There is a separate Vanguard Financial Plan product that is similar to the plan part of this service, but you must implement the recommended portfolio yourself and it is a one-time consultation. The recommended portfolio for both products should very similar if not identical. The cost is $1,000 for those with under $50k in combined assets at Vanguard, $250 for $50k-$500k in assets, and free for over $500k in assets. The Finance Buff got one and did a review.)
Portfolio construction and Investment methodology. Their investment methodology incorporates Vanguard’s company values of advocating low costs, diversification, and indexing. As a result, recommended portfolios will mostly include Vanguard’s broad index funds and/or ETFs. They can and will take into account your existing positions or special requests, as long as they meet certain standards. Taken from their brochure:
The recommendations made by VAI in connection with the Service will normally be limited to allocations in Vanguard Funds and will generally not include recommendations to invest in individual securities or bonds, CDs, options, derivatives, annuities, third-party mutual funds, closed-end funds, unit investment trusts, partnerships, or other non-Vanguard securities, although you may be able to impose reasonable restrictions upon our investment strategy.
They will work to maximize after-tax return. They will not attempt to “predict which investments will provide superior performance at any given time”. No market timing here.
Quarterly portfolio review and rebalancing. Each quarter (with timing determined by your contract anniversary date), they will review your portfolio. If your portfolio asset allocation deviates from the target asset allocation by more than 5% in any asset class, they will rebalance your portfolio by buying and selling the appropriate funds. There is a prescribed fund hierarchy in order to do this will minimal tax impact.
Ongoing contact and advice. At any time, you can contact a Vanguard PAS advisor to talk about your financial plan. There are no set limits on how many times you can contact them. I was told that if you have $100,000 to $500,000 in assets, you will be directed to a team pool of CFP advisors. If you have 500k or higher, you will be assigned a specific person to be “your advisor”. Of course that person may change from time to time if they switch jobs, etc.
No DIY Trading! You are not allowed to make any trades yourself in any portfolio managed by VPAS. You must call your Vanguard advisor and discuss and proposed changes for them to execute. Online trading will be disabled in your account. This may be weird for long-time DIY investors.
In your Service Agreement, you’ll agree not to purchase or sell securities in your Portfolio while enrolled in the Service, and you’ll be blocked from such activity until you terminate the Service. You’ll also be prohibited from establishing or maintaining other services on any accounts in the Portfolio, including but not limited to checkwriting and automatic trading services (such as automatic investment/withdrawal/exchange) and setting required minimum distribution (RMD) payments. Other account transactions or services may be restricted or unavailable through the web experience, but can be processed or enabled with the assistance of your advisor.
Recap and Commentary
This is a managed portfolio product. That means that they will determine a low-cost portfolio of Vanguard funds (mostly index) based on your specific needs, implement it for you, and provide ongoing advice and adjustments as needed. Everything will be done through a Vanguard representative, not with the click of your mouse. Such guidance will ideally help you handle your emotions when it comes to investing, as there will be someone to help you keep following your plan during both up and down markets. There will be someone to talk with whenever you have any life changes or additional questions.
0.30% of $100,000 is only $300 a year, making this quite a bargain at that level. At much higher asset sizes, I would prefer switch to a flat fee as paying $5,000 or more every year starts to feel a bit steep. I would say that if you have under $100,000, don’t fret and just buy a Vanguard Target Retirement Fund as that is essentially a simple managed portfolio.
After doing my research, my new suggestion to my wife is to pay for Vanguard Personal Advisor services if I am unable to manage our investments. She is brilliant but lacks the interest (and time if I’m gone with our kids and all) to do it on her own and I trust Vanguard to do a fine job. The reasonable fees, ability to keep my assets at Vanguard, and assigned human advisor make it better in my opinion than any other “robo-advisor” option. Still, I hope she never has to sign up.
There are many articles about rising college tuitions and how to best save for college. But according a recent study, in 31 states the annual cost of day care for an infant exceeds the average cost of in-state tuition and fees at public colleges. From this WaPo article:
We accept that it typically takes 18 years to sock away a sizeable-enough college nest egg. Considering that child care is an equivalent, if not greater, expense and that the average maternal age at first child birth is 26, this suggests that we should similarly start putting money away for day-care expenses when we’re roughly 8 years old.
Here’s the state-by-state breakdown:
It has been a year since we paid off our mortgage early. I already discussed our reasons for doing so in that post, so I won’t repeat them here. I also wrote a really long post on every single facet I could think of in the Pay Off Mortgage Early vs. Save More For Retirement debate. So I won’t go into that here either.
But how do we feel a year later? Did we regret it? Let’s take a look at what happened from March 2013 to March 2014.
Mortgage rates bounced around a bit but in general look to be about half a percentage point across the board. (Source: HSH.com) I probably couldn’t get the same mortgage rate I had before anymore, but it would still be a pretty low rate historically.
Investment returns over the last year were quite robust. If I model my portfolio roughly with the Vanguard LifeStrategy Growth Fund (VASGX) which is a low-cost index fund split roughly into 80% broadly diversified stocks and 20% broadly diversified bonds, my trailing 1-year return would be 15%.
Bond interest rates in particular went up overall. The 10-year Treasury Bond rate went from 1.8% to nearly 2.8% over the last 12 months. (Source: FRED)
(Note I don’t talk about the value of my home. This is because paying extra towards your mortgage early is not an additional investment in your house. You already own the house so you are already exposed to any change in home value regardless of your mortgage size. The mortgage is just another debt with an interest rate.)
So interest rates went up and we could have earned more money investing the money in my portfolio rather than pay down my 3% mortgage. Well, if I had a time machine maybe that would matter. But in reality it has been great. The lack of a mortgage reduced our monthly expenses significantly. We have been able to work less and got to spend an entire year watching our colicky baby grow into walking, talking, little person (meaning we are still more tired than ever before, ha) while still maintaining good cashflow and thus minimal financial stress. I’m not saying this applies to anyone else, but paying off our mortgage early has worked out well for us.
What makes children, or even adults, succeed? It’s commonly believed that cognitive skills, also known as intelligence, are a primary factor. Smart people are the successful ones, right? Tests like the SAT measure this stuff, skills like pattern recognition, reading comprehension, and math problems.
But in the book How Children Succeed: Grit, Curiosity, and the Hidden Power of Character by Paul Tough, the author discovers a lot of evidence that doesn’t support that theory. Instead, non-cognitive “character” skills like perseverance, curiosity, optimism, and self-control may be even more important.
Tough weaves together various research studies and experiments to make this argument. Here are just a couple of examples:
- GED vs. High-school graduates. Passing the GED test means you are proficient in the same academic areas as an actual high-school graduate. Yet people with GEDs are consistently less likely to graduate college, have lower incomes, and are more likely to be in jail. Why? Perhaps beings a high-school graduate requires additional traits – the inclination to persist at a often-boring task, the willingness to delay gratification for a long-term goal, or the ability to adapt to different social environments.
- KIPP charter schools. KIPP schools are charter middle and high schools that take in lower-income students by lottery (no test screening) and use intensive educational efforts with the ultimate goal of a 4-year college degree. The first few KIPP classes improved their standardized test scores in middle and high school significantly. Yet the actual college graduation rates were disappointing, with a curious pattern:
The students who persisted in college were not necessarily the ones who had excelled academically at KIPP. Instead, they seemed to be the ones who possessed certain other gifts, skills like optimism and resilience and social agility. They were the students who were able to recover from bad grades and resolve to do better next time; who could bounce back from unhappy breakups or fights with their parents; who could persuade professors to give them extra help after class; who could resist the urge to go out to the movies and instead stay home and study.
Further good news is that character skills appear to relatively malleable; you can learn to improve your level of grit and self-control. KIPP schools now provide their students with a “character report card” as well as traditional academic grades.
This book is a great read for parents and educators, but I would say that the conclusions extend to adults and even personal finance. We all need these skills to be good citizens. Being financially secure is simple on paper – spend less than you earn, invest the difference for the future, and keep it up every year. Hmmm… that sounds a lot like self-control, delayed gratification (and perhaps optimism ), and persistence.
I would argue that these character skills are more important than what you could learn in any book about Roth IRAs or modern portfolio theory. The question is how do we teach adults these traits, or is it too late?
The popular Berkshire Hathaway (BRK) Annual Letter to Shareholders by Warren Buffett is now available to the public. Download it here [pdf].
I’ve been haltingly working on making preparations for my family in case of my premature demise. I’ve done a number of things, but I’m still not sure if my wife can manage our investments when I’m gone. Should I try to teach her, even if she has little interest? Should I find an advisor? Should I hire him/her now, even though I am a control freak? Interestingly, Buffett addresses this issue partially in his letter.
First, Buffett repeats his advice that while he doesn’t believe in efficient markets, he does believe that non-professionals should invest their money in low-cost index funds.
My money, I should add, is where my mouth is: What I advise here is essentially identical to certain instructions I’ve laid out in my will. One bequest provides that cash will be delivered to a trustee for my wife’s benefit. (I have to use cash for individual bequests, because all of my Berkshire shares will be fully distributed to certain philanthropic organizations over the ten years following the closing of my estate.) My advice to the trustee could not be more simple: Put 10% of the cash in short-term government bonds and 90% in a very low-cost S&P 500 index fund. (I suggest Vanguard’s.) I believe the trust’s long-term results from this policy will be superior to those attained by most investors – whether pension funds, institutions or individuals – who employ high-fee managers.
Of course, I’m sure the sum set aside would be enough even if kept 100% in cash. But index funds were still a surprise to me given how many smart money managers Buffett knows. At the minimum, I figured he’d leave a big ole’ pile of BRK shares (managed by some of those smart people that he already hired). But I forgot that Buffett has already committed his BRK shares to charity.
Buffett’s simple advice made me think about my plans again. I would also leave my wife a relatively simple index fund portfolio and a paid-off house. My casual advice given to her so far is that she can spend 2-3% of the total balance each year without worrying about the money running out. With the life insurance proceeds, that 2%-withdrawal value is a bit more than what we spend now, so it shouldn’t be too hard.
If she needs help, she can contact the Certified Financial Planner that Vanguard offers clients ($50k in assets gets you access to a discounted plan from a CFP). I figure that even the cookie-cutter portfolios that they may recommend won’t be too bad in the big picture. I know this is not a complete plan, but well, I also don’t want my wife going to a high-fee manager.
The idea that you wanted to do better than your parents was a strong one in my family and community. Two major studies on economic mobility were recently released, with the following findings:
- Children growing up in America today have the same chance of moving up (or down) the income distribution ladder as children born in the 1970s. No more, no less. However, the overall numbers remain lower than other developed countries.
- Upward income mobility varies substantially based on geography. They describe the U.S. as a collection of “lands of opportunity” that have high rates of mobility across generations, whereas in other places few children escape poverty.
If you want to see how the place where you grew up fared (based on where you lived at age 16), check out this interactive map from WaPo which tracks the upward income mobility of children of parents with income at the nation’s 25th percentile, or about $30,000 per year. Dark blue means no change from parents, light blue means they moved up to the national average, and darker yellow means they moved higher than average.
Will and trusts. We are fortunate to have a family friend who is an estate lawyer, and she was able to assist us with creating all of these legal documents. They included:
- Designating a Durable Power of Attorney for financial and medical decisions, including backups.
- Designating who would take care of our children, including backups
- Distribution of assets and personal items. Mostly the money will go into a trust for the kid(s).
Living Will. In case one or both of us are incapacitated, this included:
- Medical power of Attorney and backup in case of being physical incapacitated
- Advanced directives
- Discussions of our wishes with family.
If you can find a good estate lawyer, I would recommend that route as they should have the experience to explain all of the potential issues in your state including being prepared for future law changes. I may try to write about the general issues later once I learn more. I also meant to compare my documents with those produced by services like Legalzoom, but haven’t gotten around to that. As for costs, it will vary depending on how complicated your situation is and how many additional documents you need prepared and reviewed (power of attorney, trust, etc.).
Life insurance. We each have a $1,000,000 term life insurance policy. We think this number is more than adequate given our future expected needs and our existing savings. If one of us dies, the other will ideally not have to work anymore. If both of us die, there should be enough to cover all living expenses plus any educational expenses. To get an idea of cost, try Term4Sale.com.
Short-term disability. We both have short-term disability through our employers. I don’t feel it is necessary to buy an additional individual policy as we have sizable cash reserves.
Long-term disability. Mrs. MMB obtained an individual long-term disability insurance tailored to her profession. This was done through a recommended local insurance broker. I did not pursue buying a long-term disability plan. This is due to the fact that I felt our portfolio is large enough to provide a substantial cushion, and also due to the fact that the physical demands of my job aren’t very high and thus I worried it would be hard to qualify for benefits. Upon further thought, however, I do think I should at least price it out. Another thing to do in 2014.
- Passwords. All major passwords are stored in an encrypted password manager, with most sites having a unique complex password such that one hacked database won’t affect the security of other accounts. My wife uses it all the time now and is familiar with it.
- Cash reserves. We have one year of expenses in cash held in an FDIC-insured bank account. This will provide a cushion so that nobody will have to worry about money until life insurance proceeds arrive.
- Spousal budget education. We did have a few discussions about our current monthly cashflow situation (income and expenses) and what spending levels could be supported with our current portfolio and with the addition of any life insurance proceeds.
- Spousal investor education. Can my spouse manage the finances without me? Probably, but not as optimally as I’d like. I did very little in this area, and this will be the focus on our 2014 resolutions.
I think we did pretty good in terms of estate planning, but for 2014 I’ll need to be much more proactive in sharing my investing knowledge. I’d like to learn how to make some simple videos and share them on Youtube.
Businessweek’s cover story this week is about how fathers do the work/family balancing act. The article talks about how men want to be more involved in family life as well as women but face their own unique obstacles yada yada, but this part caught my eye:
When Trombley [research engineer at Ford Motors] was expecting his first child, he and his wife, who also works at Ford, weren’t thrilled with the child-care options available, and she wasn’t eager to become a stay-at-home mother. Trombley remembered that a colleague from several years back had worked out a novel solution with her husband, with both taking part-time schedules to allow them to split the week up and each be home with their kids for half of it. Ford didn’t offer paternity leave, but it did offer a part-time track so long as an employee’s manager approved it. When baby Dylan arrived, Trombley went to his bosses and told them he wanted to drop down to 70 percent and work from home two days a week. [...] There are now three other men in his department with similar part-time setups; there were none when Trombley started.
Is there a list of large, Fortune 500 employers that offer such a “part-time track” option? I only found some job board sites like 10til2 and FlexJobs. I did find this 2004 research paper Beyond the Mommy Track: The Influence of New-Concept Part-Time Work for Professional Women on Work and Family [pdf]. From the abstract:
Compared to their counterparts who worked full time, mothers who worked in these part-time positions reported significantly greater work/family balance and did not report significantly less career opportunity. The part-time group reported 47% fewer work hours and 41% lower income than the full-time group. These data support the notion that new-concept part-time work is a viable option to assist women in professional careers to successfully integrate their family career.
I’m selfishly fascinated by the idea of part-time work for salaried jobs (as opposed to hourly workers). I’ve met part-time doctors, engineers, professors, lawyers, even judges. For most of them it’s been a figure-it-out-yourself exercise, but hopefully the idea of breaking down the traditional “full-time” job into smaller pieces is gaining momentum in the corporate world. It would not only be great for mothers and fathers, but anyone who wants more control over their life.
As part of our transition to parenthood (less time) and part-time work (less income), Mrs. MMB and I have been trying to get more organized with our finances. I’ve eased up on my control-freak ways and we’ve shifted as many bills as we can to auto-pay status. I still try to pay everything I can with credit cards in order to make things easy to track and of course, maximize credit card rewards. Here’s a rough diagram of our current situation:
We’re still trying to stick with our existing simple budgeting system and only putting money into our checking account that we are willing to spend. That way we basically force ourselves to meet a minimum savings rate for the year by “paying ourself first” with a good chunk of our paychecks into savings-type accounts (401k’s, separate bank accounts, brokerage accounts, etc). If the checking balance still grows past a certain point (hasn’t been happening much lately!), then we skim off some and transfer it over to savings.
I would note that I don’t put the credit cards themselves on auto-pay, as I still want to spend the time and look over those statements each month. I know some folks do this as well to reach nearly full-automation.
Another backup use for this chart is for reference in case something happens to me, as I usually keep track of all the bills. This fits into our 2013 resolution to get our crap together.