How To Do The Most: The Money Edition
Hi! I’m Phuong, and I lead Marketing at Empower. While my day job requires me to be (somewhat) creative, I’m actually obsessed with spreadsheets when it comes to my finances. Yes, the old-fashioned Excel spreadsheets. Someone wise once said, “Anything anyone still does with a spreadsheet is a business idea”. Whatever. It works.
Having been financially independent since the day I left for college, I learned to be very extra with my money. No, I don’t write down everything I spend in a notebook, or balance my checkbook (how do you do that, btw?). But I just love knowing everything is in its place, that I have a plan. Maybe I feel obligated to be good with my money, having gone to business school. I should ask my shrink next time.
If you’re interested in how to be super extra with your money, read on:
1. I estimate how much I spend on eating out 🙄
To build my budget, I figure out how much things cost on a weekly basis, then scale from there. For example:
- I literally don’t go out here in SF (does anyone?) so my Fun Fund should only be a meal out for me and my husband a week. Ok, maybe a craft coffee or two. Multiplying that by 4 is my monthly Fun Fund.
- Sporadic expenses like Entertainment are hard to estimate, but maybe a couple of movies a month? That’s why I’m a fan of subscription services, as long as I’m actually using it.
→ More realistically, have Empower track how much you spend on things month over month, and take the average to build your budget.
2. I figure out how much I have to spend every day
After allocating my budget based on the 50/30/20 rule, and my estimations of how things should cost, I divide whatever left over between my husband and I, to the day. If it seems realistic, I have a good plan. But life happens, and my spreadsheet is not good for anything beside giving me permission to pat myself on the back.
→ Don’t make my mistake, let this nice little chart in Empower (okay, it’s huge) tell you how much you have left to spend through out the month.
3. I created a category for EVERYTHING in my Mint account
Like “Iceland 2012” or “Yoga” or “Green Smoothies”. That’s why I no longer use Mint. My little head can’t keep track of why I created those custom categories in the first place. Now I get a sad email from Mint every month:
Sorry, Intuit, it’s me, not you. I’m only a (fallible) human.
→ Utilize the standard categories that come with your Empower account! Fit a square peg in a round hole if you have to, ’cause it will help you pick up patterns and realize quickly when your lifestyle changes and should your financial planning.
4. I automate everything
My husband and I live paycheck to paycheck. While that is not rare in an expensive city like San Francisco, we intentionally do that because we want to make sure we put our money to work the moment it hits our accounts. Like making extra payments towards my business school debt, or saving for our future down payment. I make sure to time the the transfer a few days after my payday, just in case we have an unexpected expense.
→ Pro tip: Skip the cumbersome “Link External Accounts” option in your bank portal and just let Empower do it for you. Set aside a percentage, or a fixed amount, per paycheck, or at a certain time of the money, turn off your phone and go to sleep. No electronics at bedtime, especially checking your Empower (though we won’t blame you if you have to 😘)
5. I put everything on my credit cards
Okay, I will stop saying “everything”. But didn’t I say I’m a person of extremity? Because I’m a maximizer, I know which credit card gives me the most points for each purchase (thank you, my ex-consultant friends). But that does require a bit of work upfront to read through the fine print of credit card benefits, and comes with significant regrets when you realize you should have used the other card. As any well-taught business school graduate, I blame “the system”, regulations that restricts the interchange fee banks can charge merchants on debit card transactions. Because banks make way less money when you swipe your debit card, they’re not incentivized to reward you for using your debit cards, which is actually a very good way to make sure you only spend what you have. On the other hand, credit card is a lucrative business. So, sure, swipe your credit card and worry about it later. If only someone would build a rewards debit card…
→ If you choose to use credit cards like me, check your real-time balances and your credit card due dates with Empower, and make sure you have enough in your bank account to cover the automatic payment that you responsibly set up in advance. This should help you:
That’s all, folks. Leave a comment if you have tips how to be extra extra.
P/s #1: Maybe all my money is in yen, maybe I was just being a little extra and turned on “Scramble my data” (Empower > Profile, scroll down) to hide my money problems from you nosy readers.
P/s #2: I love Empower for everyday checking in with my money on the go, or when I’m hanging out on the couch, but habits die hard so I use spreadsheets to put a stake on the ground when my financial goals and reality change materially, such as a new job. And I couldn’t figure out how to unsubscribe to Mint.