Maybe it’s because I’m a money nerd, but I enjoy reading about other people’s financial life. I love to see how other people manage, save, invest and earn their money, especially those who have successfully reached their financial goals. I’ve gleaned some great strategies and tips just from reading about how others operate their finances.
Though I don’t share our exact numbers (maybe someday!), in the spirit of sharing, here is how we manage money at the Centsibly Rich household.
An inside look at how we manage money
How we earn it
Single Income
We’ve been a single income family for almost 17 years now, so we rely on Alan’s income. (Though I’ve had my fair share of side hustles over the years and worked part-time now and then, it’s never been enough to pay all the bills.)
Other income
All extra income is variable and inconsistent. The advantage to living on one income for so long is this extra income is “bonus” money that we save, as much as possible.
Blog. I make a small amount through the blog. At this point, it’s not much and barely pays the expenses, so we don’t use it, just save it for future blog expenses.
Craigslist and ebay sales. There is rarely a month that goes by when we don’t have something for sale online. We sell things we no longer need/use and also flip items picked up for free or cheap. (Yesterday we sold a headboard we made ourselves!)
Market returns. I’m not sure if this fits here or not, but the money we have invested often earns returns (it could also lose money too!). We invest through our tax advantaged accounts (401k, IRAs, HSA) and rarely pull money out (though we will be using some HSA money this year due to high medical expenses).
Future plans for income
Real estate. We have purchased our first investment property (though we haven’t taken possession) and plan to purchase a few more. Any cash flow from the property will be saved for future investments at this point in the game.
Where we keep it
As I wrote this, I realize we have several accounts and may need to simplify at some point, but here is what we currently have:
Checking
We have two personal checking accounts and two business accounts.
One personal account is for paying bills, the other is a sinking fund of sorts and earns .49% interest.
One business account is for the blog and the other is for rental properties.
Savings
We have two savings accounts. One is for vacation (Capital One 360). The other is a general emergency fund (with Ally Bank). We also pay our annual propane and insurance out of this account.
Each month, automatic transfers are set up to pull money from the personal checking account and deposit it in the savings accounts.
Digit
I still have my Digit account (even though they started charging for the service). Digit uses algorithms to take small amounts out of the personal checking and deposits it into a savings account. I like it because it saves money that would probably otherwise be spent. I actually thought about closing this account when they started charging, but decided it was worth it (to me). I’ve saved over $3000 in the last year with Digit.
If you’re interested in learning more about how Digit works, check out my review.
Taxable account
We have a small taxable account with the robo advisor, Wisebanyan.
401k
Alan started contributing to his 401k in our mid 20s, when he got a permanent, salaried position. For many, many years, he contributed the minimum to get the company match (FREE money!). In our mid 30s, we started raising our contribution when he got raises each year and now we max the 401k contributions each year ($18,000).
IRAs
Each of us have both Roth and Traditional IRAs with Vanguard. We started these back in 2010 and, though we haven’t maxed them each and every year, most years we do. (If you’re curious, we like index funds – specifically, VTSAX).
Stock
My parents purchased a life insurance policy for me when I was a teenager. That company went public when I was in my 20s and I received 108 shares at that time. Soon after, I cancelled the policy (in favor of term life insurance), but retained the shares. I will probably sell this year.
529 College Savings Plan
The kids each have their own 529 accounts, started when they were babies. There isn’t enough to cover 4 years at a university, but it’s enough to help them out. We plan to help them as much as we can outside of the 529, financially and otherwise. Jake is planning to go into the Air Force, so his college expenses will, eventually, be covered.
How we manage it
Automation, automation, automation!!! This is the key to consistently saving. The 401k, 529, HSA and savings accounts are automated each pay period. We use our tax return and savings throughout the year to front load our IRAs.
Our investments consist of index funds (low fees, good historical performance, plus we’re in it for the long haul), balanced out with some bond funds. Soon we will add real estate to the mix.
Debt
Our only debt is our mortgage, though we will have another small mortgage very soon (rental property). At this point, we are not trying to aggressively pay down this debt (at 3.25%), but are using any extra money to continue investing in real estate. At some point, we will start accelerating repayment on the mortgage on our primary residence.
Our spending
Credit cards. We use credit cards for most day to day purchases, such as groceries, household needs, etc., as well as some bills (such as our cell phone). I keep a running total of each credit card (now Tiller does this for me!) and we pay it off each month without fail, earning rewards along the way. (We’ve paid for vacations in the past with these rewards – but right now, we’re just using cash back cards).
Automatic bill pay. Most of our utilities and other monthly expenses are automatically withdrawn from the personal checking account. We always have an extra cushion in the account and track bills each week to eliminate any risk of insufficient funds. (We never pay those pesky bank fees.)
Online bill payment. I like to thoroughly check my credit card statements each month. I don’t have them automated for this reason, but I do pay them online (saves a check and a stamp!).
Checks. I still write two checks each month!? We can’t pay online or automate our trash and water bills. 🙁
Tracking
We track…everything! And I mean, everything. For several years, I relied on my personal spreadsheet for this. Recently, I started using Tiller, which automatically pulls all transactions from my accounts and puts them into a spreadsheet for me to categorize.*
I check in at least once a week, so we can adjust spending as needed for the rest of the month. I have no set budget, but we adjust as necessary to stay within a certain spending range each month. There are months we go over (vacation), but we have savings specifically for those months.
So there it is, friends! After writing this and reading through it, I realize our system could come across as complex, but it’s actually quite simple and doesn’t take much time after it’s set up. We take a set it and forget it approach to saving and investing, and simply take a look at spending each week and adjust as needed.
Do you enjoy reading about other people’s finances as much as I do? How do you manage your money? Do you automate? Are you as attached to spreadsheets as I am?
*I will write more about Tiller soon, but so far I LOVE it. It’s saving me a ton of time, catching transactions I had previously missed, plus I still get to use a spreadsheet!
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I (we) admit that we like to see how other people are managing their finances; even the mundane details.
We have just about everything automated and primarily use our credit cards for automatic bill payment and day-to-day expenses. Of course, we pay these off every month and try to maximize credit card rewards. Our only remaining debt is our mortgage, which we’ve decided to pay off aggressively.
As far as tracking goes, we’ve been using Mint for years and have been happy with it. We still use spreadsheets for planning and some historical purposes. Hard to give up those spreadsheets 🙂
That’s why I love the personal finance community – I don’t feel so odd about nerding out on stuff like this! I’ve never tried Mint, but I know many people use and like it. And, yes, you gotta love those spreadsheets! 🙂
I’m still using digit too even though there is a small fee. I think people got a little too up in arms over it. I think pros outweigh the tiny little con.
Agreed, Tonya. I really love the painless, automatic savings – that I don’t really even notice. I know it helps me save more than I otherwise would. Plus, I like managing it from my phone.
Your approach sounds very similar to ours. Fairly straightforward and automated. We also have 529s for the kids and don’t plan to 100% cover four years of college, but will help them out. And we have been mostly single income (with some part-time income until baby 2 was born) for years. It’s nice to hear from someone else who has taken that route, with all the emphasis on maximizing earnings that’s out there.
I agree, Kalie, it’s nice to hear from others who have chosen similar paths as far as the earning/savings route. It’s hard for some people to understand why we still choose to live on one income. This may change once the kids are completely out of the house, but until then, we are willing to do without the additional income.
We definitely enjoy checking out other bloggers’ budgets, goals, and progress updates. When we first established our budget, it took seeing other couples’ food spending to realize we were out of control. Believing that we could cut our spending in half was over half the battle to get us actually doing it. Thanks for sharing!
I’ve thought about sharing the nitty gritty details for this reason, Ryan. Someday I’ll start sharing specifics on the month-to-month. This is how I decided I could scale back on the food spending as well – I saw how little others were spending and challenged myself to do the same. And now, it’s just a habit. But one thing people need to keep in mind with the food spending (and other) comparisons is prices can be quite different, depending on where you live.
Congrats on the investment property…would love to hear more about it in a future post! How many do you think you guys will purchase in the future? I should probably consolidate some bank accounts and open new ones for rental property as well as blog (though there isn’t much income to speak of). It’s better to have it separate so it is more organized.
Oh, I definitely plan to post about the investment property – if we ever close. Closing has been delayed, so we’ll see! We have plans to buy 5-7 properties in the next few years, basically enough to generate enough income to cover our expenses. I think it makes things so much easier to have separate blog and rental property accounts. Even though the blog doesn’t account for much income, it’s easier to separate out the expenses.
So excited to hear about your rental property! I hope the closing goes well. I just set up a blog account for some side work I got through it. I don’t earn much yet either, but it is easier to keep track of things. Congrats again!
Thanks so much, Vicki! 🙂
I always enjoy seeing how others are managing their finances. It helps me gauge how I’m doing, and often I can glean bits of information I can use. Personal Capital and spreadsheets are the tools I use. We are automating more and more. Thanks for sharing Amanda!
I use Personal Capital to look at the big picture too, but have an attachment to my spreadsheets! 🙂 Thanks Brian!
Thanks for sharing! It is fun the read about how other people manage their finances ? That is the best way to learn!
Like you, I use Ally for my savings account, and my main investment accounts are my 401(k), two IRAs, HSA, and a taxable account! I’m interested to research Tiller to see how it compares to Mint!
Thanks Taylor! I’ve never used Mint, so I can’t compare the two. But I do know that if you’ve used and liked Google sheets before, you’ll probably like Tiller.
Sounds like you have a good system that works for you. We still track everything, but we use Quicken (as we have for 10+ years) as we like to manually enter and categorize transactions. It helps us to stay on top of things.
Thanks, Gary! Quicken works well for many people. I’ve never tried it, but the key for me has been to have those transactions automatically pulled from my accounts. When I was doing everything manually (from receipts), I discovered I was missing a few transactions.
I also love to see how people organize their money/accounts. I absolutely love YNAB because I can see exactly where I’ve planned to use each and every dollar I have, but I’ve heard some many good things about Tiller that I need to try it out. (plus: I love spreadsheets to death).
Good luck with the investment property. We’ve had some great renters and some not-so-great renters. We want out, but if we ever purchase more rentals in the future, I’ll have an excellent contractor/handyman and property manager in place so I don’t have to directly deal with them at all.
Another spreadsheet lover! 🙂 If you try Tiller, it’s free for 30 days. I like the sheets from How Do I Money – and Derek has a great video tutorial on his site for that template.
Thanks, Kathryn! I plan to manage the properties, but just to learn the ropes. I may turn them over to a property manager sooner than I think!
Good to know about Derek’s Tiller sheets. I know he’s a brand ambassador and have chatted with him a couple times about it. It’s just finding the time. It’s going on the official list of to do’s right now.
Congrats on all of your saving! Maxing out the 401k – that’s quite an accomplishment!
Thank you! My only regret is not doing it sooner! 🙂
I love reading about how other people manage their finances – thanks for sharing!
The money tracking app is a good shout – I’m guilty of being more of a ‘mental estimate’ money tracker than putting figures in an app, but it’s definitely a great way of making sure everything stays on budget.
Thanks, Yaz! 🙂 I discovered I was missing quite a few online transactions when I was just using receipts to track, which kind of skewed my perception of what we were spending. Now I know exactly and can make better adjustments.
Like you, I love these inside looks at people’s money management. Personal finance nerds, unite!! 🙂 Automation really is key, I think. Set and forget really helps take away any chance of not making contributions.
“Personal finance nerds, unite!!” YES! That’s why I love this community! All of us nerds can gather together and talk about this stuff that most people don’t want to talk about. 🙂 Automation is huge! It’s the only way we stay on track.
Yes, bring on the details! It’s great to see how other people manage everything.
Personally, I haven’t moved on from manually tracking my expenses yet, due largely to reluctance to hand over my bank passwords. I love spreadsheets for tracking/budgeting, though, so we’ve been using one I pulled together.
I finally got rid of my last monthly check when I realized that there’s no fee for online payments for my mortgage if done through autopay ($5 fee for one-time online payment is absurd).
I completely understand your reluctance to hand over your passwords, Jared. It took me a while, and little by little, I’ve become more comfortable with it. I always read about the security of the app.
Like you, I had been using my own spreadsheet for years…and still love spreadsheets. I still use my own net worth tracking sheet.
I wish I could stop writing those 2 checks each month! Oh, you’re right, $5 for a one-time payment is so not worth it, butt the autopay is a good option if it’s free! Thanks for stopping by, Jared! 🙂
Hi Cents,
Nice yard here. Great view – good company.
Thanks for sharing. You’re managing almost exactly the way my wife and I do.
Clear all credit cards at the end of each month and for a long time our only debt was a mortgage.
We just moved to a smaller city with lower property value to get rid of the mortgage.
For tracking I just use Google Drive spreadsheets. Not a fancy way to do it but I’m so used to a basic sheet.
Brent
Thanks, Brent! 🙂 Happy to connect with you! We go back and forth so much on the mortgage. If we decide to stay, we will start paying it down after we get our rentals. But, there is always the possibility of downsizing to eliminate the mortgage (which appeals to me!). Thanks for stopping by and commenting! 🙂
It’s always interesting to see how other people do it. Our picture is not too different, minus the property ownership : ( I really saw recently how critical automated savings is. I have had an expensive few months with many family birthdays and traveling (in part for my sister’s 50th birthday). Every day it feels like there is a new crazy expense and I have felt down because I have not saved at all. But of course, what that means is I haven’t saved any EXTRA at all. I am saving every month, money I don’t see or think about. So I remind myself not to get too down. I’m using some savings to pay for stuff, but I can’t get depressed about that. Paying for expenses outright is a beautiful thing. And it is great to be able to pay for everything with a credit card and reap the rewards, without any of the interest or debt.
Yes, Linda! I didn’t save any “extra” in May either, but when I look at it, we’re still saving quite a bit, so it’s not really a fail at all. I still like to have that “extra” each month, and when I don’t I feel a little down too, but looking at the big picture things are still just fine! The automation works!
I’m definitely going to have to check out Tiller. That looks incredibly interesting and as a budget nerd I always love seeing what is out there. Thanks for sharing!!!
Do check out Tiller! 30 days free, so nothing to lose. And really, 30 days is all you need to see if it works for you because it’s so easy to set up and get started.
Managing finance is a special art and you seemed to be a specialist with plenty of ways to save and multiply money. We too very much trust in automation and keeping all the purchases towards the credit card as it can be monitored in a single statement and make a single window of automated payment. The rentals seemed to be pretty much interesting and are definitely worth a try. We use a spreadsheet to track the future financials and also have formulated when and how to reach the financial goals.
Thanks, Rajkumar! 🙂 Sounds like you have everything set up to work well for you too. The first rental is our experiment…if it works out and we don’t hate it, we’ll continue. Otherwise, we’ll just work on the other investments. Gotta love those spreadsheets – you can create one for anything you need, including your goals.
Thanks for sharing. I never heard of Tiller and will take a look, although I must admit we like to manage all accounts hands on. We make automatic payments, and before we retired we did automatic investing. But for tracking, net worth, portfolio analysis, etc. Mr. Groovy uses his own tools.
I’m excited to see how you do with the rental property. Also, I’m sure you’ve put a lot of thought into this and I may have missed it in a post — but how quickly do you plan on adding to your real estate investment portfolio? You’re younger than me so I’m sure you have less fear, but I would be hesitant to take on multiple mortgages living on one salary, without my own house paid off.
Sometimes your own tools work best. I thought so too, but I actually really have saved time using Tiller (plus it eliminates the human error factor I was running into).
I’m excited to see how we do with the rental property too. Can’t wait to start writing posts on it. We’re supposed to close on Monday (more on that in tomorrow’s post). I haven’t talked much about our plans, so you didn’t miss anything there. 🙂 We would like to add a second property this year and then see where we’re at. The plan is to acquire enough properties to cover our expenses. Though we are pretty conservative, this is one area we’re pretty comfortable with a little risk (so far, anyway), so the additional mortgage isn’t a concern at this point. I’m not sure how I’ll feel about it with 3 mortgages. We’re treating it like a business and have a loose strategy in mind, which does include paying down all the mortgages at some point.
I love learning how other people track their finances as well, even though that’s probably super boring to other people. I’m always open to learning new tips and tricks on how to save or earn more money, and I do like seeing others reach their goals along the way.
Currently I use a combination of spreadsheets and a personal finance called Skrooge. It’s mostly manual, but I think it actually helps keep me closer to my purchases.
Just in this post I learned about Tiller and I plan on checking it out though!
I know! I was completely hesitant on even publishing that post because of the risk of it being boring – but I love to read those types of posts myself. Thankfully, I have good company here in the pf community!
I’ve never heard of Skrooge (but the name is fun!). I’ll have to check it out. Definitely check out Tiller – it’s worked for me when nothing else has!
Thanks for the comment!