Household Cashflow Diagram with Automated Savings & Bill Payments

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:

Household Cashflow Diagram with Automated Payments

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.

Comments

  1. Jon, nice post. I needed to do something like this for my wife and this looks great. Easy to read and simple. It also looks like a Google docs drawing and we share things all the time there.

    Thanks for this idea.

  2. Do you and Mrs. MMB fight about money? I get mad at my wife sometimes when she buys our baby girl new clothes what seems like all the time. We have two boys and a girl. I always felt like we had tons of money until the baby girl was born. She’s the spender and I’m the saver, and the policy for the first 8 years of marriage was simply don’t spend money unless you have to. She was good at following that before, but now, I feel like I have to get crack down and start a real budget because it seems money is disappearing.

  3. Jimmy M says:

    I love this idea. I’m making one today to share with my wife. It’s a very nice, visual way to express where your money goes every month. I think it also lets you easily identify things that might not be “critical” in case something bad happened and you had to cut back.

  4. Don’t understand your hesitancy to not go the autopay on the credit cards as long as you have the discipline to review the statements at some point monthly. You got to make the payment anyway and it avoids all the manually work of logging on, directing payments, meeting deadlines, etc. I’ve never had a problem challenging a questionable charge after the fact (within 60 days) and the money is usually returned right away. If I know anything, Mr MMB is definitely disciplined !

  5. Stephen says:

    @ Scott

    Budgets are not very good since you set a limit that you “must” spent mentally instead of consciously evaluating every spending decision to optimize your spending. At the end of the month its either yay we are below budget or boo we are over instead of thinking – We spend the least amount as possible

  6. Stephen says:

    When are you going to cut your cash leaking umbilical cord of cable Mr. MMB? The coaxial cable running through your house might as well be a vacuum hose sucking out your cash but also your time!

  7. @Mike – Thanks, I’m glad you liked it.

    @Scott – We do talk about it a lot more now after the baby was born. Before, we had high incomes so our savings rate was high even with some silly purchases. She isn’t a bad bad spender, so why fight about it? It gave me cover when I made my own silly purchases.

    But now, we both want to work less. With that as our higher goal, my wife has definitely got on board with the idea of seeing how much she spends. I would start with the simple question – “Do you know how much you spend each month?” If not, then let’s find out and move on from there. I asked her to try Mint, but she didn’t like it and is doing it with pen and paper. So let her do it her way maybe.

    @Joshua – I see your point, but these days I’ve been tempted to just pay the credit card bill and not even look at it. If it was on autopay, I’d be tempted even more. I also worry about an autopay *not* going through for some reason and then being subject to penalties and interest. The first couple of months when I started autopaying utilities, it was actually more stressful because I had to make sure it worked!

    @Stephen – Haha, we’ll see. We don’t watch TV much anymore, but haven’t killed it yet. The second Baby MMB asks to watch an episode of The Kardashians or My Teenage Kid is Pregnant and So Am I, it’s gone. :)

  8. Never give any company permission to automatically take from your account. Mistakes do happen, and it may be difficult to fix.

  9. “Never give any company permission to automatically take from your account. Mistakes do happen, and it may be difficult to fix.”

    I most definitely concur EXCEPT for the major credit card companies such as Chase & American Express and only to pay credit card statements. I’ve never had a problem and I’ve been doing this since 1992 when you had write in and beg them to debit you automatically. I also charge 2 Starwood, 3 Southwest & 2 Marriott and 3 other pt earning AMEX’s monthly so autopay is real critical to me.

    But I won’t give a gym permission to hit my checking account, that is for sure.

  10. ParatrooperJJ says:

    One thing you might do is turn on autopay for the credit cards minimum payment option. This prevents you from ever missing a payment.

  11. Have you consider a career in Sarbanes Oxley controls work?

    I think you chart is pure overkill. I just pay the bills the day they arrive. With a credit card if they will take them. Interest rates are so low it doesn’t hurt to leave a cushion in the checking account.

  12. what did you use to make this? ;)

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