I have been going some budgeting today.
Over the last few years I’ve tried a bunch budgeting methodologies to try and really get a grip on my spending. Once of my favourite methods is the YNAB ( or envelope) method. Unfortunately, being in the UK I can’t use the YNAB service effectively as I can’t connect a bank account. This means that I have to enter each transaction manually. Eventually errors creep in, outgoings are missed and balances drift apart. This makes the whole thing a little pointless and very frustrating. But, before the drift sets in I did see that it could work for me.
Today, I’m trying something new of my own devising. My goals are
- Make the whole thing simple and automatic
- Design a process that helps to inhibit bad behaviour.
– Fixed home costs. Things like mortgage, utilities, taxes, etc.
– Debt repayment, Credit card, car payments etc.
– Everything else, like Netflix subscriptions, phone, etc.
The remainder is then split into savings, and a weekly allowance. This allowance is then paid onto my Monzo pre-paid debit card. The idea is to spend only from that card. To this end, it will be the only card I carry with me on a day to day basis. I will remove details of all other cards from amazon and the like to introduce friction when I try to use those cards.
I’m hoping that by giving myself a small weekly budget I will be able to manage my less predictable outgoings without having to worry about what might be coming out of my other accounts later in the month. The Monzo card gives almost instant feedback on purchases and everything is captured and categorised in their app. This visibility will help me see where I am waisting money and will let me tune my spending behaviour. Finally, it lets me run out of money in a way that will not result in overdue payments.
I do run out of money, I won’t have wait long for more. I am going to call this the “External Ego Method” as it’s and external system designed to reign in my financial id.