🪴\zansh.in\blog

3 min read

Bad with Money

For me, being bad with money starts by having a single bank-account.

┌────────────────────┬─────────┐
│ Transaction        │ Amount  │
├────────────────────┼─────────┤
│ Salary             │ 1000.00 │
│ Rent               │ -600.00 │
│ Fuel               │ -100.00 │
│ 25 burritos        │ -150.00 │
│ 25 more burritos   │ -150.00 │
│ Energy bill        │ -150.00 │
└────────────────────┴─────────┘

"You just need a budget!" they say.

No, I need shackles. For me, shackles looks like a second bank-account.

• The first account is where my salary lands
• The second account is how I pay for stuff

I only want to have to deal with one balance when I pay for stuff.

To complete the equation then, I have to pay myself.

Even if employed, I don't want the boss to pay me. Nothing against them of course; they provide a source of income. But I pay me.

It's a bit of a chore though, so automation is needed. I setup a Standing Order to periodically transfer spending-money to the account I'm going to look at the most.

I'll definitely want to avoid being depressed about the regular fixed bills like rent or utilities appearing in the ledger. So those get paid from the Income Account directly.

 ┌──────────────────────┬─────────┐
 │ Account 1            │ Amount  │
 ├──────────────────────┼─────────┤
 │ Salary               │ 1000.00 │
 │ Pay self             │ -150.00 │
 │ Rent                 │ -600.00 │
 │ Fuel                 │ -100.00 │
 │ Energy bill          │ -150.00 │
 └──────────────────────┴─────────┘


 ┌──────────────────────┬─────────┐
 │ Account 2            │ Amount  │
 ├──────────────────────┼─────────┤
 │ Pay self             │  150.00 │
 │ 25 burritos          │ -150.00 │
 │ 25 more burritos     │ -150.00 │
 └──────────────────────┴─────────┘

Instead of blowing money on excess burritos, I paid my Energy bill.

After bills and paying myself, what's left in the Income Account?

Well, nothing in the above example. But if there was, maybe it could go into a... Savings Account.

That means another Standing Order. One that takes the remaining money from the Income Account and puts it in one with a non-zero interest-rate.

"What if there's money left in the Expense Account at the end of the month?"

You guessed it. Just drop it manually into the Savings Account I already setup and I'm back to zero for the new month.

 ┌──────────────────────┬─────────┐
 │ Income Account       │ Amount  │
 ├──────────────────────┼─────────┤
 │ Salary               │ 1100.00 │
 │ Pay self             │ -150.00 │
 │ Rent                 │ -600.00 │
 │ Fuel                 │ -100.00 │
 │ Energy bill          │ -150.00 │
 │ Savings 1            │ -100.00 │
 └──────────────────────┴─────────┘

 ┌──────────────────────┬─────────┐
 │ Expense Account      │ Amount  │
 ├──────────────────────┼─────────┤
 │ Pay self             │  150.00 │
 │ 20 burritos          │ -100.00 │
 │ Savings 2            │  -50.00 │
 └──────────────────────┴─────────┘

 ┌──────────────────────┬─────────┐
 │ Savings Account      │ Amount  │
 ├──────────────────────┼─────────┤
 │ Savings 1            │  100.00 │
 │ Savings 2            │   50.00 │
 └──────────────────────┴─────────┘

And that's it really.

Little by little I move my lustful gaze from my solo do-everything "bank account" to a dedicated Expense Account. Instead of being fooled each payday into thinking I have bags of money, my Expense Account shows me the truth: I'm broke all the time.

And yet my bills get paid and savings slowly accrue.

Even better, I'll barely notice. Just the way I like it.

Maybe it's smoke-and-mirrors, but for the me who is bad with money, it helps.

12 Apr, 2022