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Crazy idea or not? Came to me in a dream

Frequent Contributor

Crazy idea or not? Came to me in a dream

Currently, my salary is direct deposited in the following manner (as I have had it set up for years):  a fixed portion goes into savings and the remainder into checking.  The amount that goes into checking covers all my bills and everyday expenses.  Savings is just that, savings, to cover unexpected bills, vacations etc.

 

Since my pay is biweekly, my paychecks don't fall on the same days every month.  This creates a challenge since I can't guarantee the funds will be available to pay bills automatically on a given day, so instead, I schedule bill payments manually and schedule them to be paid after the following paycheck and before the due date.

 

Now for the crazy idea I had in a dream:  I could set my own "pay schedule" by having all my net pay deposited to savings, then have a portion automatically transfer to checking once or twice a month.  That way, I always know the funds will be there on the same day, and I can pay my bills on the same days every month (setting up autopay on most if not all of them).

 

I can see the following benefits of this:

 

1.  Monthly budgeting is simpler, since I'll know exactly when and how much will land in checking every month.

2.  I can autopay most of my bills every month, saving time and reducing the chance of mistakes.

3.  I can more easily evaluate my spending vs. income, by recording my checking account balance on the same day every month.  I can adjust the amount of the transfer as needed to keep it in balance.

4.  Whatever I don't spend/transfer to checking stays in savings.

5.  Any additional money that comes in (annual bonuses, raises, or a month where 3 biweekly paychecks hit) goes directly into savings.

 

What do y'all think.  Crazy, or ingenious?

 

Total CL: $4,000. No love for me. Gardening (no apps or CLIs) until I have $40K in savings.
FICO 4/18/18: EQ 784, TU 819, EX 778
FICO 5/18/18: EQ 795, TU 819, EX 782
Message 1 of 13
12 REPLIES
Frequent Contributor

Re: Crazy idea or not? Came to me in a dream

I like it!  adds stability  to an unstable situation.  In the end, if it works for you,,, do it Smiley Happy

 


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Message 2 of 13
Frequent Contributor

Re: Crazy idea or not? Came to me in a dream


@LowLimitswrote:

Currently, my salary is direct deposited in the following manner (as I have had it set up for years):  a fixed portion goes into savings and the remainder into checking.  The amount that goes into checking covers all my bills and everyday expenses.  Savings is just that, savings, to cover unexpected bills, vacations etc.

 

Since my pay is biweekly, my paychecks don't fall on the same days every month.  This creates a challenge since I can't guarantee the funds will be available to pay bills automatically on a given day, so instead, I schedule bill payments manually and schedule them to be paid after the following paycheck and before the due date.

 

Now for the crazy idea I had in a dream:  I could set my own "pay schedule" by having all my net pay deposited to savings, then have a portion automatically transfer to checking once or twice a month.  That way, I always know the funds will be there on the same day, and I can pay my bills on the same days every month (setting up autopay on most if not all of them).

 

I can see the following benefits of this:

 

1.  Monthly budgeting is simpler, since I'll know exactly when and how much will land in checking every month.

2.  I can autopay most of my bills every month, saving time and reducing the chance of mistakes.

3.  I can more easily evaluate my spending vs. income, by recording my checking account balance on the same day every month.  I can adjust the amount of the transfer as needed to keep it in balance.

4.  Whatever I don't spend/transfer to checking stays in savings.

5.  Any additional money that comes in (annual bonuses, raises, or a month where 3 biweekly paychecks hit) goes directly into savings.

 

What do y'all think.  Crazy, or ingenious?

 


Whatever works best for you is a good idea. Bottom line is that you are thinking, being proactive, and being overall responsible.  Try it and see how it works for you, then tweak it if/as necessary.  I certainly wish I'd done that when I was younger! Best of luck!

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Message 3 of 13
Community Leader
Valued Contributor

Re: Crazy idea or not? Came to me in a dream

Well, I think it makes sense to have all your paycheck going into checking and then transferring the "surplus" to savings. But, I also get paid bi-weekly and think it's pretty straight forward - every other Friday is payday. Actually, with direct deposit to DCU it's usually available Thursday morning, but I don't count on that in planning cashflow. The one that's annoying is my Social Security benefit, it's paid on the 4th Wednesday of the month and depending on when the 1st Wednesday of the month hits that can vary between the 22nd to the 28th. But, my largest bills are due on the 1st of the month, so it's always there by then.

 

P.S.: Dream more pleasant dreams than finances, more than enough time to worry about that during awake hours. Smiley Wink


Fico 08: 720/721/719 TU/EX/EQ
Message 4 of 13
Frequent Contributor

Re: Crazy idea or not? Came to me in a dream

Interesting idea, I'll have to let it digest. 

 

Currently I do the reverse of what you do.

*Set amount to checking, based on my expenses plus small buffer. (e.g. if my pay is $1,000 biweekly, pretend my expenses are $1,500 a month, I set aside $800 to checking)

*Let the remainder, which varies a small amount, fall to savings (e.g. in this example, $200 biweekly to savings)

*On the two 3-pay months, transfer over third pay to savings

I just began this system at the beginning of 2018 and it has worked very well at keeping me on a budget and building my savings without any effort thus far. Your system is kind of accomplishing the same thing through a different means, minus my third bullet point.

As far as the unpredictability of cash flow, I have a spreadsheet for that, but it is tailored to me and not particularly shareable. I use my own spreadsheet so that I can schedule out anticipated bills and expenses several months into the future to see what money should be going out when (barring any unexpected expenses). This also allows me to keep track of when to pay which bill, etc. I know, autopay is big around here, but I've survived the last year and a half without it. As previous poster said, you have to find a system that is most comfortable and sustainable for you. 

 

Keep in mind, if you do any other transfers in/out of savings, the Reg D limits on transfers from savings. Some institutions implement it differently (in/out, whether certain transaction types count) but it is 6/mo. 

 

I also agree w/ Dave, sweeter dreams for you! lol

Ch7 discharged 10/2017. Pre-file FICOs high 400s.
04/2018 EX 644; EQ 670; TU 648
Message 5 of 13
Regular Contributor

Re: Crazy idea or not? Came to me in a dream


@LowLimitswrote:

Currently, my salary is direct deposited in the following manner (as I have had it set up for years):  a fixed portion goes into savings and the remainder into checking.  The amount that goes into checking covers all my bills and everyday expenses.  Savings is just that, savings, to cover unexpected bills, vacations etc.

 

Since my pay is biweekly, my paychecks don't fall on the same days every month.  This creates a challenge since I can't guarantee the funds will be available to pay bills automatically on a given day, so instead, I schedule bill payments manually and schedule them to be paid after the following paycheck and before the due date.

 

Now for the crazy idea I had in a dream:  I could set my own "pay schedule" by having all my net pay deposited to savings, then have a portion automatically transfer to checking once or twice a month.  That way, I always know the funds will be there on the same day, and I can pay my bills on the same days every month (setting up autopay on most if not all of them).

 

I can see the following benefits of this:

 

1.  Monthly budgeting is simpler, since I'll know exactly when and how much will land in checking every month.

2.  I can autopay most of my bills every month, saving time and reducing the chance of mistakes.

3.  I can more easily evaluate my spending vs. income, by recording my checking account balance on the same day every month.  I can adjust the amount of the transfer as needed to keep it in balance.

4.  Whatever I don't spend/transfer to checking stays in savings.

5.  Any additional money that comes in (annual bonuses, raises, or a month where 3 biweekly paychecks hit) goes directly into savings.

 

What do y'all think.  Crazy, or ingenious?

 


I do something similar to your "process" - some amount gets automatically deposited into savings and then manually pay bills from checking. I like your idea but your reverse osmosis process might have 1 flaw. 

If you transfer all your net into your savings, and then schedule multiple transfers from savings to checking -

Your control over your set savings amount can vary. Say you decide to pay off a little debt, $50 here, $100 there, might make you overlook how much you are actually savings in a month. The operator here being "savings", which should be first.

If you can manage that then life is gooood!

 

Have your tried calling your CC and banks to move your due dates to After you get your paychecks? Things can be managed from there too, no?

 

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Message 6 of 13
Established Contributor

Re: Crazy idea or not? Came to me in a dream


@LowLimitswrote:

Currently, my salary is direct deposited in the following manner (as I have had it set up for years):  a fixed portion goes into savings and the remainder into checking.  The amount that goes into checking covers all my bills and everyday expenses.  Savings is just that, savings, to cover unexpected bills, vacations etc.

 

Since my pay is biweekly, my paychecks don't fall on the same days every month.  This creates a challenge since I can't guarantee the funds will be available to pay bills automatically on a given day, so instead, I schedule bill payments manually and schedule them to be paid after the following paycheck and before the due date.

 

Now for the crazy idea I had in a dream:  I could set my own "pay schedule" by having all my net pay deposited to savings, then have a portion automatically transfer to checking once or twice a month.  That way, I always know the funds will be there on the same day, and I can pay my bills on the same days every month (setting up autopay on most if not all of them).

 

I can see the following benefits of this:

 

1.  Monthly budgeting is simpler, since I'll know exactly when and how much will land in checking every month.

2.  I can autopay most of my bills every month, saving time and reducing the chance of mistakes.

3.  I can more easily evaluate my spending vs. income, by recording my checking account balance on the same day every month.  I can adjust the amount of the transfer as needed to keep it in balance.

4.  Whatever I don't spend/transfer to checking stays in savings.

5.  Any additional money that comes in (annual bonuses, raises, or a month where 3 biweekly paychecks hit) goes directly into savings.

 

What do y'all think.  Crazy, or ingenious?

 


I think the plan is awesome. For your situation, it take the unknown and keeps you sane. I do my monthly budget and deduct as I spend(especailly on gas and groceries). It works for me. I have been trying to look at my bills per paycheck instead of per month(getting paid every two weeks ) to plan my months out. I put one offs or quarterly items in a different area and deduct as the come up. It keeps me focus o them so I am not in shock when it is billed.

Message 7 of 13
Valued Contributor

Re: Crazy idea or not? Came to me in a dream

Sounds like a good plan to me. I'm glad to see you are saving for what you called unexpected expenses. They are not really unexpected expenses though, as they are going to happen. For many these expenses are actually just unplanned for, which leads many to use a credit card for them. Credit cards should be used for short term debts only unless someone is taking advantage of 0% interest offer and knows for sure they can pay it off before it expires. Credit cards are otherwise best not used as emergency funds.



TU fico08=831 05/31/18
EX fico08=800 06/18/18
EQ fico08=826 04/18/18
EX fico09=823 06/02/18
EQ fico bankcard08=856 05/22/18
Message 8 of 13
Regular Contributor

Re: Crazy idea or not? Came to me in a dream

This is great idea 

Message 9 of 13
Valued Contributor

Re: Crazy idea or not? Came to me in a dream

Let two months worth of bills accumulate in your checking and then you won't need to worry about it EVER.

 

Then set a budget and send only your spending budget to your checking and the remainder to savings. 

 

This is particularly useful in the event you earn overtime, bonuses, or raises. Keep spending the same and the increases automatically get saved.

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Message 10 of 13