blogPg14_acctConfig.html eMONEY: A USER GUIDE

PURPOSE

We don’t set up our bank account so we can pay bills; we set up our bank account so we can accomplish what we set out to do. We choose financial obligations that draw us toward our goal.


SUB ACCOUNTS

Although you will set up your bank account to mirror your spending plan, some Classes and Types of accounts work better with brick & mortar local institutions, and others with digital banking.

BRICK & MORTAR

You'll want quick access to cash, and for that, local banking works best. The problem with local institutions is they offer nothing in the way of interest. Though they are quite willing to lend your money to borrowers, they feel no obligation to cut you in on the profits. AND they charge fees. Digital banking offers thirty times as much interest on deposits as do local banks. Their mobile apps are faster and easier to use, AND they never charge a fee.


DIGITAL BANKING

At Discover Bank, sub accounts include the following:


HOW TO SPEND MONEY

There's a right way and a wrong way to spend money. Or, I should say, there are several right ways to spend money, depending on the circumstances. I'm not talking about pre-eminent need, here. We've been there, done that, got the t-shirt. I'm talking about using different forms of payment, in different situations.

Here are the right ways to spend money:
  1. Autopay. Every Scheduled Expense should be handled with autopay. Set it and forget it.
  2. Debit Card. Every Expense Item in your spending plan should be paid for by Debit Card (DC) - unless:
      a. you want to track the expense separately, or
      b. it is a member of a collection of Related Expenses (Holiday, Vacation, etc.), in which case you should use a
  3. Credit Card.

Credit Card Types

Having the credit card companies work for you amounts to employing credt cards in the following ways: Standard - the common, everyday usage; Dedicated - for purchases we want to track separately, or Aggregate - a collection of related expenses (Vacation, Holiday, etc.).

Linda and I use three Dedicated Credit Cards (DCC): one for items purchased at the Grocery Store (when the statement arrives, we can seeminstantly how much we spent at the Grocery Store that month); another for Gas for the cars (duplicate cards let us track our vehicles separately on a single statement), and a third for Dining Out. Dining out is the single biggest waste of money on the planet - but it's just so much fun!

Dedicating a credit card to a single Expense Item effectively delegates the tracking and filing to the credit card company. It couldn't be simpler. And online access eliminates the filing cabinet! Prior to Excalindur (b.e.), anyone who operated on a budget had to collect and record receipts. Excalindur made that aspect of budgeting simpler. But now, none of that is necessary. All the time-consuming tedious tasks that formerly drove people to distraction when trying to manage their finances have been eliminated. And it doesn't cost a cent. All you have to do is spend the money.

How

For seasonal or related expenses, such as Vacations, Holiday Expenses (Christmas), or Special Events (family reunion, etc.) we use an Aggregate Credit Card (ACC). Because these types of events rarely overlap in time, one Aggregate Credit Card is probably sufficient. Season to taste. With and ACC, related expenses appear on a single statement. When the statement arrives, you can tell instantly whather you spend more, or less, than you had planned for the event. This helps to budget for the next: allot more for the event, or cut back on your spending.

One word of caution: credit cards pose a grave danger; making it possible to acquire things you do not have the money for and cannot afford. One must firmly resolve never use a cedit card in that way. If you don't trust yourself to keep that committment, you must avoid credit cards altogether.

Proper use of Forms of Payment outsources your record keeping to the banks and credit card companies, providing (emulating) accurate and reliable accounting and reporting, at no cost, so you don't have to spend precious time keeping records and tallying results.

The final weapon in our Forms Of Payment arsenal is the
  4. Personal Check. Use a personal check whenever no other form of payment is accepted. We'll break this down in more detail in a moment.

So, what's the wrong way to spend money?

Well, what form of payment did I not mention?

(hint: it rhymes with "ash")

If you spend cash, you have to get a receipt and remember to record the expense. If you forget, or forget the amount, or make a math error ... then you've got a problem. Cash is not only your Achilles heel, it harbors bacteria. Handling cash is like sharing handkerchiefs.


FORMS OF PAYMENT

Credit cards pose a danger because they make it possible to acquire things you cannot afford. It negates any benefit of prioritizing expenditures, making it Possible to a mass large quantities of stuff that provide no satisfaction.


ROUTINES

Keep your gas tank full, and pay attention to gas prices, as you drive. When you get down half a tank, plan to fill it up at the lowest price. If it gets down to a quarter tank, fill it up at whatever price is convenient. Do not let your tank go below a quarter full, for three reason: 1) you can never tell when an emergency may arise, 2) the last thing you want is to have to stop and get gas when you’re already late; 3) your fuel pump will perform better and last longer.

For scheduled expenses (expenses for which the due date is known in advance) use autopay. Be sure to ransfer the amount from sub account to checking account prior to payment, to avoid non-sufficient funds charges and/or late fees.

For all other expenditures, use the Debit Card. Again, transfer the amount in advance to avoid non-sufficient funds charges and/or late fees. For Example, when dining out, transfer the amount after you get the check, but before you use your card. At the gas pump or grocery store, transfer more than you expect to spend, then , after you get the receipt, transfer back the difference.

When a debit card is not an acceptable form of payment, write a personal check.


SO, HOW DO YOU KEEP TRACK OF EVERYTHING?

<<Enter>> the Comptroller (below)

The comptroller provides a way to monitor the entire operation. It does what Excalindur does, but delegates the busy work. Think of it as Excalindur's savant twin.





Note the checkboxes. They help you keep track of where the funds are at any given moment. You monitor and control the money flow from your phone or PC.



Please proceed to the next lesson




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MONEY: A USER GUIDE

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