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Here's a practical approach that have been working well for our family. Forget about recording your transactions, it is way too tedious. The solution: Use 'ja
by hasperdi 8y ago
Here's a practical approach that have been working well for our family.
Forget about recording your transactions, it is way too tedious.
The solution: Use 'jars' for budgeting. Our jars are bank accounts.
First we have a main bank account where money comes in. Set all recurring bills (eg. rent, utilities, phone) to direct debit from this account. Let's call this income account. Leave the debit card at home, don't use it.
Then set an estimate of how much you be spend every week on groceries, transportation, etc. See this as your pocket money.
Then set up another bank account, set an automatic weekly transfer from the income account to this pocket money account. The amount is what you estimated previously. Everything in this account is for you to spend. If you spend less the week before, then you can spend it this week... or not. But you should not spend more than what it is there.
Adjust the automatic transfer amount if needed.
Now, if you want to save... it is the same strategy. Set up a saving target, open a savings account and do automatic periodic transfer from the income account.
Try it... it requires very little effort, makes you more conscious on how much you spend and on what and after a while you will be surprised with how much you're saving.
- xupybd 8y agoI did this for a very long time and would recommend. But now I have only one account as it lowers my mortgage payments by having all my savings in the one account and that account being my home loan. So now I use hledger. But your way is still way easier. It can get a little hard to track the number of things I do. At present I have 20 something jars.
- leemuro 8y agoSorry if this seems like a dumb question, but are there any particular banks/accounts you use for this method? I would want it to be very easy to open accounts online with no hassle if I were to use this approach.
- bootsz 8y agoCapitalOne 360 allows you to instantly open savings accounts and you can have many of them (not sure what the maximum is--it's high, I've had about 8 at once). That said I liked the bank a lot better when it was ING Direct before they got acquired.
- hasperdi 8y agoI use several banks. Here in the UK, I use Starling & Monzo. There are also international providers such as Skrill and Transferwise. Check what is available to you. Do not be discouraged by nominal account fee. You will save much more money than bank account fees.
- bootsz 8y agoI like this approach a lot and used it myself for years. But I found it kind of falls apart as soon as you want to start using credit though. It's great if you only use cash and debit cards.