Update (& Need Help Managing Outflow)

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Topic Author
peterwantstosave
Posts: 381
Joined: Fri Nov 24, 2017 8:28 pm

Update (& Need Help Managing Outflow)

Post by peterwantstosave »

Friends,

I wanted to provide an update and also ask for help managing outflow.

Since joining Bogleheads in November 2017, I've gotten a lot of help managing money and understanding how to use it better. Thanks to this community for teaching me.

Assets

Here is where things stand:

Emergency Fund $25,000 (5 in CHK and 20 in SV)
Roth IRA $21,000 (all maxed out for 2021)
403b $73,000 (maxing out for 2021 from each paycheck)
401k1 (variable annuity) $11,000 (old, from current employer, can no longer contribute and cannot move because I still work there)
Israel Bonds $300 (maturing October of this year)
Brokerage Account $1,600
Physical Cash $300
I also own my home outright. It's worth about $90,000, maybe a bit more or a bit less. It's not "nice" but it's mine and it's paid off.

Net worth is around $225,000

<b>Background</b>

My emergency fund is in cash in a brick and mortar bank
My Roth IRA is a mix of VTSAX (Vanguard Total Stock Market Admiral) and PREIX (T Rowe Price 500 Index Fund). I bought/buy PREIX because it is commission free.
My 403b is 100% VTSAX (Vanguard Total Stock Market Admiral). New contributions are also 100% VTSAX.
My 401k1 is 100% CREF Equity Index R1 (QCEQRX)
Buying Israel Bonds was dumb (cannot liquidate early) but thankfully they mature in about four months. I've been waiting about five years (more) to correct this mistake.
My brokerage account is 100% PREIX (T Rowe Price 500 Index Fund) because it is commission free.
I keep physical cash because I struggle to manage outflow (more on this below) I use it for things like meals out, etc.
My Roth IRA and Brokerage Account are at US Bank Investments (Self Directed). I do have an advisor if I need one, but I only use them to do things like get new/lost/stolen cards rushed to me. This board has probably taught me more than my advisor knows :-).
My 403b and 401k1 are at TIAA (I hate TIAA, but it's what's available).
My CHK and SV are at US Bank (not great, not terrible, basically fine. They're a bank, what can I say?).

Liabilities

I have five credit accounts that I could draw from. I always pay them off in full. They are:

US Bank Cash+ ($11,700 credit limit)
US Bank Platinum ($12,900 credit limit)
US Bank Personal Line of Credit ($12,000 credit limit)
American Express Blue Cash Everyday Card ($5,000 credit limit)
Goldman Sachs Apple Card ($4,000 credit limit)

$0 liabilities

<b>Where I am now</b>

I feel so much better financially. I have money now and know where it is and where it's going. The listed above are all of my financial accounts. I've done a TON of streamlining and simplifying and it feels so good.

I have other open taxable brokerage accounts (at other firms) hanging around here and there, but to my knowledge they all have zero balances and I know they have zero activity.

Historical Problems

I am recovering from a lot of financial trauma. (I always assumed I would fail financially, learned/realized I was the source of much of my financial trauma). My problems with financial management are well documented by me across this board. I used to open tons of accounts with many different houses. I'm still not entirely sure why I did it. Likely, I thought each new account would bring some sort of security, even if it didn't have any money in it. Vanguard kicked me out in 2019 for opening too many accounts. I can't exactly say I blame them. I was acting out trauma (I think). I do wish I could have everything (incl. CHK and SV and 403/401k at Vanguard). I have also opened and closed a ton of accounts at Fidelity, but I don't have any open accounts or balances there now. I once did this at US Bank Investments too, but have stopped doing it. I'm working on no longer opening anything new anywhere. I do this to honor my past while encouraging post-traumatic growth.

<b> More Background</b>

EDIT: My credit score is in the mid-to-high 700s across all reporting agencies :-)
SECOND EDIT: I've learned a lot about money by reading John Bogle, Dave Ramsey, Robert Kiyosaki, Jon Kabat Zinn. I wouldn't say I do all of what any of these people suggest, but I had a period where I did Dave Ramsey and paid off my house. I also basically like Robert Kiyosaki's idea of using assets to pay off liabilities. I usually move money from my taxable brokerage account to pay off any credit card balances, for example. Thanks to John Bogle and this board, I prefer index funds because I felt myself overwhelmed by choice, but I don't "understand" why to have bonds, when they're not earning much more than cash. So, I stick with huge equity index funds like VTSAX and PREIX. Wherever possible, I choose equity index funds (401k1). I am terrified of debt that I can't shake, and also terrified of unexplainably losing it all. I realize the latter is completely unrealistic and hopefully unlikely, given how hard I'm working (financially and professionally).
THIRD EDIT: I'm working on maximizing savings rate into my investing accounts, hence the maxed out Roth and the maxing out of the 403b. Seeing big numbers flowing into those accounts helps me cope with my feelings of financial trauma and my need with perfectionism. I feel good seeing this: it suggests to me that I'm doing what I can.

A Wish

I do wish I could have everything in one place. but I don't see this as possible, because I am currently contributing to my 403b.

What I'm seeking help with now

I need help managing outflow. I tend to use whichever financial instrument is close at hand, which leads to a lot of different outflows for little things.
I'm having trouble "seeing" what I spend. I use Marcus Insights and it sort of helps, but I hate that it doesn't have everything (apple card, israel bonds) on there. I'm a total perfectionist, full on type A, in addition to my financial trauma. This combination of perfectionism and trauma means that change, even positive change, is very difficult for me. I can do it, but even when I know what to do, I need to fully believe in it. It's taken me lots of years to max out my 403b and Roth IRA. I've done it because I've seen it work for people on this board.

It helps me a lot that the 403b max out comes directly from my paycheck. If I see money, I tend to either spend it or transfer it somewhere. The spending is probably a trauma response and the transferring is probably a desire for control. I'm working on not doing any transfers and not doing too much spending. This is a daily process for me, but I'm succeeding (thanks in large part to this board) more than I am failing.

<b>How do people on the board manage their outflow?</b> I usually spend between $1,600-$1,800 per month. This spending is utilities and discretionary spending. I would love to see one number of what I spend every month and have a replicable process for spending. I've thought about opening one credit card and one checking account that I would only use for outflow, but my history with opening lots of accounts has me hesitating. Experiences are welcome.

I make about 50K a year. I'm 37. I'm working on getting promoted in the academy to an administrative position. Depending on the promotion, my salary would increase a lot, to somewhere between 75k-150k/year. I'm a tenured professor, so my job is mostly secure.

Thanks for listening to such a long posting.

P
HomeStretch
Posts: 6383
Joined: Thu Dec 27, 2018 3:06 pm

Re: Update (& Need Help Managing Outflow)

Post by HomeStretch »

I recall (and posted in) your prior threads about your accounts consolidation and cleanup. You did a great job and made a lot of progress.

As far as managing cash flow, here is what spouse/I do in case it is helpful:

CASH INFLOWS are captured as follows:
1) net pay is direct deposited into a bank checking account
2) miscellaneous inflows from tax refunds, etc. are ACH/mobile deposited into the same checking account
3) investment income is automatically credited to our investment accounts

CASH OUTFLOWS are captured as follows:
1) the same bank checking account is used for bill pay (for utilities, credit cards, taxes, etc.), to write the occasional check and to withdraw ATM cash. For easier tracking, we spend very little cash and most spending is done via credit card for rewards.
2) the only other cash outflow we have is from employer payroll deductions for payroll/income taxes, health insurance add 401k/FSA contributions. Note: charitable contributions/spending is done through a Fidelity Donor Advised Fund.

CASH TRANSFERS between the checking and investment accounts are limited to month-end. I either transfer excess cash OUT to the investment accounts (for contributions to IRAs, investment purchases) or transfer cash IN if needed (rare, something like a car purchase).

It’s easy from the above for me to summarize our cash flows and see/review what our true expenses are. I use Excel which is sufficient for my needs. Posters in other threads have recommended the YNAB (You Need A Budget) and Personal Capital apps. Perhaps you would benefit from using an app.

For me, simplicity is the key to managing and understanding my balance sheet (includes my portfolio) and cash flows. My suggestion is to minimize any tinkering, transferring and number of accounts/credit cards as they will only complicate tracking and managing your cash outflows.
Last edited by HomeStretch on Thu Jun 10, 2021 6:55 am, edited 2 times in total.
Topic Author
peterwantstosave
Posts: 381
Joined: Fri Nov 24, 2017 8:28 pm

Re: Update (& Need Help Managing Outflow)

Post by peterwantstosave »

Thanks, HomeStretch, for always having my back.

Much appreciated as I get into better habits

P
dbr
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Joined: Sun Mar 04, 2007 9:50 am

Re: Update (& Need Help Managing Outflow)

Post by dbr »

As far as tools to maintain information on spending I maintain an Excel spreadsheet and have done for years. Before that I did it by hand in a notebook.

What goes into the spread sheet is a tabulation of every checking account and credit card transaction labeled by type of expense. The data is obtained by downloading credit card tabulations and manually coding each transaction and by entering all checking account debits and coding each transaction. I do this at the end of each month and it probably takes me about a half an hour a month to do it. We don't distinguish what the items are we spend cash on, so cash is just classified as cash expense when it is taken and shows as a check for cash or an ATM withdrawal.

I keep a running list of expenditures by month by category, which is more or less an automatic tabulation in the spreadsheet. From there one can chart monthly expenditures though I tend to use 12 month smoothing to make charts. One can also compute annual averages.

So the cost is about 30 minutes of labor a month and I have a very complete tabulation of what we spend and what we spend it on. The current spreadsheet has data back to January 1, 2001. Probably these days it is only the data since retirement that is interesting.

This same spreadsheet has data entry points to keep track of when to pay credit cards due and what the standing draws are for auto bill pay either to the checking account or credit cards and what the auto deposits are for income.
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Kenkat
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Location: Cincinnati, OH

Re: Update (& Need Help Managing Outflow)

Post by Kenkat »

Sounds like you have made amazing progress. Take a minute to congratulate yourself on a job well done.

Given how you have described yourself - perfectionist - you might benefit from financial management / budgeting software. Quicken, Personal Capital, Mint, Moneydance, etc. These would let you track everything in one place. This works great for me but isn’t right for everyone. Give one a try and see if lit feels right. A simple spreadsheet as indicated above can also be a good approach.
Lee_WSP
Posts: 4795
Joined: Fri Apr 19, 2019 5:15 pm
Location: Arizona

Re: Update (& Need Help Managing Outflow)

Post by Lee_WSP »

peterwantstosave wrote: Fri Jun 04, 2021 7:19 pm
I need help managing outflow. I tend to use whichever financial instrument is close at hand, which leads to a lot of different outflows for little things.
I'm having trouble "seeing" what I spend. I use Marcus Insights and it sort of helps, but I hate that it doesn't have everything (apple card, israel bonds) on there. I'm a total perfectionist, full on type A, in addition to my financial trauma. This combination of perfectionism and trauma means that change, even positive change, is very difficult for me. I can do it, but even when I know what to do, I need to fully believe in it. It's taken me lots of years to max out my 403b and Roth IRA. I've done it because I've seen it work for people on this board.

It helps me a lot that the 403b max out comes directly from my paycheck. If I see money, I tend to either spend it or transfer it somewhere. The spending is probably a trauma response and the transferring is probably a desire for control. I'm working on not doing any transfers and not doing too much spending. This is a daily process for me, but I'm succeeding (thanks in large part to this board) more than I am failing.

<b>How do people on the board manage their outflow?</b> I usually spend between $1,600-$1,800 per month. This spending is utilities and discretionary spending. I would love to see one number of what I spend every month and have a replicable process for spending. I've thought about opening one credit card and one checking account that I would only use for outflow, but my history with opening lots of accounts has me hesitating. Experiences are welcome.

I make about 50K a year. I'm 37. I'm working on getting promoted in the academy to an administrative position. Depending on the promotion, my salary would increase a lot, to somewhere between 75k-150k/year. I'm a tenured professor, so my job is mostly secure.

Thanks for listening to such a long posting.

P
If you kept the other accounts open, but unused, would you be able to cope?

Just because some accounts are open, doesn’t mean you have to use them. If you only actively use one checking and one credit card account, you can more easily track things. Otherwise, software such as Quicken is tailor made to aggregate such data.
dbr
Posts: 35952
Joined: Sun Mar 04, 2007 9:50 am

Re: Update (& Need Help Managing Outflow)

Post by dbr »

I have a spreadsheet for tracking assets. Right now it uses 12 columns to track 12 different funds or assets that are held in 7 different "accounts"

It does not seem to be overly complicated. I update it manually on a monthly basis at very little expenditure of time. All the rest of the accounting just falls through the sheets and columns of the spreadsheet. I think probably about 6 or 7 of those entries could not be electronically accessed by any app even if I wanted to saving some kind of application that can log into an account and then screen grab entries from a web page. An example would be the balance in my Subscriber Savings Account at USAA.
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RickBoglehead
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Re: Update (& Need Help Managing Outflow)

Post by RickBoglehead »

OP's problem seems to boil down to an inability to see everything in one place. Solution would be Quicken. I've been using it since 1996. You can synchronize accounts with all your institutions, and see it all in one place. And your other issue - "managing outflow" is also accomplished. Every single penny I have spent since 1996 is in Quicken. Every single PENNY. If I spend cash, I get a receipt. Since I use so little cash, charging everything (and paying them in full each month), about every 3 months I count my cash and see if it matches Quicken. If it doesn't, I enter the difference as a loss or gain. In 2019 (since 2020 was so unusual), my loss/gain, i.e. my "missing or found cash" was $2.66, all comprised of "found", i.e. I found $1.00, etc. In other words, all spending was perfectly tracked.

With Quicken, I can see groceries over any period. I break groceries into food and non-food, easily done because I enter the non-food item(s), usually 1 or 2 at most, and then the rest is food. By being aware of what you spend, you spend less, it's pretty simple.

I would STRONGLY recommend the OP get Quicken, and starting with 7/1 enter ever receipt weekly.
Avid user of forums on variety of interests-financial, home brewing, F-150, PHEV, home repair, etc. Enjoy learning & passing on knowledge. It's PRINCIPAL, not PRINCIPLE. I ADVISE you to seek ADVICE.
dbr
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Re: Update (& Need Help Managing Outflow)

Post by dbr »

An argument for one's own spreadsheet is that the individual gets to choose anything or everything he wants to see the way he wants to see it.

I expect getting familiar with an app like Quicken would be very helpful as a guide to what can be done and to build the habit of using it.
Topic Author
peterwantstosave
Posts: 381
Joined: Fri Nov 24, 2017 8:28 pm

Re: Update (& Need Help Managing Outflow)

Post by peterwantstosave »

The group is so helpful, and I am grateful.

Thank you.

I'll start by trying to use only one checking account and one credit card (USB Cash+) and will report back after 30 days time, whether I've succeeded or failed.

I'll also start by keeping my own spreadsheet. (Love the quicken idea too, and hope to level up to that).

The biggest stumbling block in making this shift for me has been having to be accountable to myself. I'm looking fear in the face in doing all this (I have irrational fears of only having one of something and then peril striking), but it's a growth opportunity and I'm happy to have the wisdom of you all to help me along.

I'll report back in a month or so about how it goes.

Fondly, Peter
HomeStretch
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Re: Update (& Need Help Managing Outflow)

Post by HomeStretch »

Perhaps it would be helpful to keep a month’s worth of cash for living expenses in a 2nd account and a second credit card in your wallet. This way if disaster strikes your primary account/card, you have an immediately accessible back-up. It’s good to have a back-up in case a card is declined (Citibank’s fraud department does this to me periodically), an account gets locked or there is a technical glitch which take a couple days to resolve.
dbr
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Re: Update (& Need Help Managing Outflow)

Post by dbr »

I agree that keeping only one credit card may not be the best choice. If travelling two credit cards is a minimum. For international travel three is better and not all on the same system (VISA, MC, AMEX).

I remember being several states away trying to buy something in a store and all the sudden the credit card is shut down. We were able to call them to find out that somewhere in their system the automatic renewal of a magazine subscription was tagged as fraud and the card was shut down.

This would be less entertaining if you are trying to fill up an empty gas tank at an unattended station late at night somewhere.
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leeks
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Re: Update (& Need Help Managing Outflow)

Post by leeks »

You do not need to open or close anything to make this simpler. Just pick one of your existing checking accounts and credit cards.

Only take cash withdrawals from that main checking account (transfer money from other accounts as needed if applicable). Use only that account for any direct payments (or checks if you ever use them).

Spend on only one credit card you keep in your wallet and use for online purchases. Put the rest of the cards out of sight somewhere (pack an extra one when traveling as an emergency backup). Change all automatic payments to the selected card. Ignore points/bonus schemes on the other cards.

Commit to only spending from those two sources for a trial period - say 3 months - and then reevaluate/adjust. Hopefully this would bring you a sense of control and simplicity as well as understanding of where all your spending is going by looking at just two statements per month.

If you desire greater analysis, you can manually enter everything from those two statements into a spreadsheet or budget program every month during your trial period. Or just in a paper notebook. Having to type/write every purchase or withdrawal will ensure you pay close attention to every item and feel you know where everything is going. Once you understand it, you can modify as desired.
Last edited by leeks on Thu Jun 10, 2021 12:49 pm, edited 1 time in total.
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leeks
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Re: Update (& Need Help Managing Outflow)

Post by leeks »

HomeStretch wrote: Thu Jun 10, 2021 12:22 pm Perhaps it would be helpful to keep a month’s worth of cash for living expenses in a 2nd account and a second credit card in your wallet. This way if disaster strikes your primary account/card, you have an immediately accessible back-up. It’s good to have a back-up in case a card is declined (Citibank’s fraud department does this to me periodically), an account gets locked or there is a technical glitch which take a couple days to resolve.
The $25K emergency funds are already there as a backup account.
Topic Author
peterwantstosave
Posts: 381
Joined: Fri Nov 24, 2017 8:28 pm

Re: Update (& Need Help Managing Outflow)

Post by peterwantstosave »

leeks wrote: Thu Jun 10, 2021 12:46 pm You do not need to open or close anything to make this simpler. Just pick one of your existing checking accounts and credit cards.

Only take cash withdrawals from that main checking account (transfer money from other accounts as needed if applicable). Use only that account for any direct payments (or checks if you ever use them).

Spend on only one credit card you keep in your wallet and use for online purchases. Put the rest of the cards out of sight somewhere (pack an extra one when traveling as an emergency backup). Change all automatic payments to the selected card. Ignore points/bonus schemes on the other cards.

Commit to only spending from those two sources for a trial period - say 3 months - and then reevaluate/adjust. Hopefully this would bring you a sense of control and simplicity as well as understanding of where all your spending is going by looking at just two statements per month.

If you desire greater analysis, you can manually enter everything from those two statements into a spreadsheet or budget program every month during your trial period. Or just in a paper notebook. Having to type/write every purchase or withdrawal will ensure you pay close attention to every item and feel you know where everything is going. Once you understand it, you can modify as desired.
Very helpful, thank you for the specifics. They will be useful in implementing this task.

Peter
Sahara
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Re: Update (& Need Help Managing Outflow)

Post by Sahara »

I find the one checking and one credit card system very effective.

For any recurring bill that’s payable via credit card, I set that automatically. And I use the one credit card at stores etc.
Then I track the transactions in the credit card, the balance, and the due date using Google sheets. I don’t have the credit card set to be paid automatically from the checking. I do that manually.

I also track every transaction in the checking account. I use a Mac checkbook app and pre fill monthly expenses through 12/31. For example I might enter $1000 per month for the credit card. Once I know the payment amount I can update the check register. You can make this a continuous checking account but I prefer to go out 12 months and then create a new one. I actually stay a year or two ahead so that I don’t miss semi annual real estate tax payments etc.

Something like quicken might do this in a more interconnected fashion but this works well for my purposes and may be something you could experiment with.

I have a feeling someone is going to create a personal bookkeeping app in the near future. Maybe it will be you. :happy
Topic Author
peterwantstosave
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Joined: Fri Nov 24, 2017 8:28 pm

Re: Update (& Need Help Managing Outflow)

Post by peterwantstosave »

Thanks all for the encouragement.

I'll certainly keep you posted

P
Topic Author
peterwantstosave
Posts: 381
Joined: Fri Nov 24, 2017 8:28 pm

Re: Update (& Need Help Managing Outflow)

Post by peterwantstosave »

Friends,

Accidentally (without really thinking) used my apple card to buy something online. Undaunted, I'm going to try to close out the month (17 or so days left) using only the apple card and one checking account. My CL is low ($4,000) but I'd like to give a try all the same. It's feasible, so why not follow through, mistake and all?

This group is encouraging, so I just wanted to share an update.

Transparency helps me lots.

Thank you, Peter
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