What does your cash flow process look like?
What does your cash flow process look like?
I'm talking about types of accounts, automatic transfers, etc. Feel free to mention specifics, but I'm more interested in higher level information like does your paycheck go to savings or checking, do you use automatic transfers, do you use a traditional bank account or something different, etc.
Basically, what happens to your paycheck? Do you like your process, or are you considering making changes?
Here's mine:
I have five main accounts:
- Fidelity Bloom Save and Spend for savings and spending respectively; each is a brokerage account
- Fidelity Cash Management Account - mostly fit the fantastic debit card
- Ally Checking and Savings
And here's the general flow of cash:
- Biweekly paycheck -> Fidelity Save
- Automatic transfer 2x/month from Fidelity Save -> Fidelity Spend
- Automatic transfers from Fidelity Spend -> Ally savings and personal spending accounts
- Automatic transfers from Ally savings to Ally checking; Ally checking is used for Target debit and automatic transfers to wife's IRA
- Manual transfers as needed to Fidelity Cash Management - I try to keep this near $0, and only transfer for travel or if I need to withdraw from an ATM
I have credit cards and other bills set to autopay in full from my Fidelity Spend account 2x/month (roughly even between the two halves of the month). I changed my credit card due dates to line everything up years ago, so now everything is pretty much automated.
I like this setup because:
- brokerage has higher yielding money market funds
- pretty much everything is automated
- can have investments living next to spending money (e.g. my efund is Treasury bills, which live in my "savings")
- I keep more sketchy account linkages at a separate institution from my main savings
- I need a brokerage anyway for my HSA, and I'm considering moving my other retirement savings to Fidelity as well to further reduce institutions
- Fidelity has better 2FA options than pretty much any other bank
I used to use Ally as my main account, but I switched to Fidelity late last year and I really like it so far. Some changes I'm planning to make:
- get my hardware security token set up with Fidelity - I've been sitting on it for months, just need to make the call
- move wife's autopay to pull from Fidelity directly; she's not on the account yet, so I need to fill out some forms
I have my entire paycheck hit my checking, without parceling out some money here and other money there. I avoid auto-pay (and electronic statements for anything that might vary), and instead pay all bills from my bank's payment portal.
Paper copies of bills go into an in-box, which I process every week or two. I look at all the bills before paying them. There is also a physical piece of paper in the in-box, which is a printout of a spreadsheet I made with all of my monthly and yearly bills. When I pay a bill, I check off the box. Not very hi tech, but it gets the job done.
If I see "extra" money building up in checking, I check the paper, and if it is not needed in the next few months, I shuffle it off to a HYSA. Periodically, I move money from the HYSA to an investment account, which is shoving money into index funds on a set schedule.
Yeah, there's a lot of manual stuff going on, and if I have a busy month I only get to the bills and not the other stuff. But I feel in better control of all of it, and less likely that I will miss a fraudulent thing happening.
This is pretty much my process too, except I’m not so organized as to have an expenses spreadsheet.
That's awesome. I know my parents liked that way, and it seems to work well.
Thanks for the input!
I have nothing to say but I see 0 comments and it makes me sad.
- I get my salary once a month
- I recently bought an apartment and maxed out my "normal" savings accounts under French law, so now I need to figure out what to do
- I'm expecting to pay 50% of my salary in discretionary spending. The rest will go to my mortgage (currently a very low %age of my salary, but I'm about to earn way less so I'll need to adjust when I'm there) and everything else probably into savings. Since all the stable savings funds are maxed out (that's about 35k), I'm going to invest in more financial products, less stable. They're EU/French, so not going to go into detail here (if there's anyone French here, !vosfinances@jlai.lu is really cool) but the idea is to do "stable stocks" (government bonds, really large companies, etc.).
Awesome, thanks! There are a few more comments now, so thanks for the support.
Thanks for starting the discussion! Here's my setup:
- Wife and I have paychecks deposited into regular credit union checking account.
- From there a small portion goes into a separate high-yield savings account with CapitalOne (currently getting 5%). This is primarily our "just in case" liquidity account that we can pull from on a dime for any unforseen emergencies.
- Another portion then goes into a Fidelity brokerage account for non-advantaged personal investments (non-401k/roth since we max those out separately and those are fed directly from the paycheck)
- Recently I've also stated diverting another portion into Tbills, though I need a better system for this.
- The only thing that remains in checking is the amount needed to cover our monthly cc payments (everything goes through cc bc I'm a cashback/point slut, and it makes no sense not to take advantage of the additional protections imo) which get paid off monthly
Currently I do all the separate account transfers manually after the paychecks are deposited. Main reason is bc I grew up quite poor so I got very good at tracking every dollar manually and never broke the habit. And it serves as a mini-audit every two weeks which is a nice bonus.
Out of curiosity, how did you set up your Treasury bill efund account through Fidelity? I've been looking to consolidate and better track my tbill purchases but haven't settled on a good solution yet
how did you set up your Treasury bill efund
Fidelity supports auto roll, so I set up a ladder by buying the same amount every few weeks with the same maturity. I wanted a three month efund of $13k, so I bought $2k 13-week t-bills every two weeks, and $1k on the thirteenth week. I started that earlier this year and the auto roll went through without a hitch.
I have the other half of my efund (the other 3 months) in Ibonds, but I'll probably end up moving that to t-bills now that I bond rates are less interesting and I prefer having everything in one place anyway. So I'll do that by buying 26 week t-bills and converting the 13-week t-bills as well.
It's a little bit of a pain to set up, but once it's going, it's completely hands off. If you're lazy, you can just buy a t-bill fund and get pretty much the same benefit, but I like owning the bills themselves for some reason. Since it's a brokerage, you can do whatever you like.
This is fantastic! Thanks for the info. I know what I'll be playing with this weekend 😀
When I was working:
- Credit card closes on the 25th
- Utility bills arrive between 20th & 2nd
- Mortgage due 30th
- Paycheck arrives 30th
- Estimate bills for the month & transfer the rest to mutual funds
Expenses all paid by credit card, so I'm always 'budgeting' for the previous month and there's no guesswork. Emergency expenses larger than a paycheck might require selling some mutual funds, but in 20 years that never happened.
Now I'm not working, budgeting is basically the same, except that interest and dividends appear at random intervals in brokerage, are no longer automatically reinvested, but transferred to checking to cover bills, usually around the same time as the paycheck used to appear.
I don't automate anything, because I want to notice if a bill is larger than expected and address whatever caused that to happen.
Without getting too into the weeds with retirement accounts and such, my paycheck gets split and direct deposited into three accounts:
- Bills. This is based on any regular recurring payments that were made last year including insurance, utilities, car payments, housing payments, property tax, services, etc. I add all that up for last year, add 10% padding and divide it by my 24 bimonthly pay periods.
- Living expenses. I don’t have a finely detailed budget. I’m a responsible spender so I can trust myself. This is irregular spending. Gas, groceries, clothing, household goods, car/ house repairs and improvements and general discretionary spending.
- Emergency fund. Everything else gets put into replenishing the emergency fund. If the emergency fund is fully funded I will manually make a payment towards my mortgage principal (or somtimes buy myself a new toy 😬)
+1 for this system. I do the same and it makes day-to-day spending guilt free and simple. A few times I have run #2 dry and had to eat beans for a few days, but I've gotten better.
We are effectively single income so I will ignore my wife's accounts.
I have:
- CU checking
- CU savings
- HYSA (SoFi) emergency fund
- Fidelity brokerage
- Fidelity Roth IRA
- Fidelity 401k
Credit cards: - USAA (general purpose)
- Chase Amazon Prime (Amazon)
- Apple Card (devices and occasionally tap to pay)
CU checking is where mortgage and bills are paid from. It is also where the money goes out of to pay credit cards down. Correspondingly CU checking gets the lion's share of direct deposit. HYSA gets a fraction, but I will top it off at the end of the month to get on target with our savings goal ($1000/mo towards HYSA as long as nothing is being spent). CU Savings are pretty much empty these days, APY is so low it is irrelevant. For whatever reason that's where the connection to Fidelity lives so I can contribute to the Roth IRA, but that is the only use anymore now that our cars are paid off.
I don't make enough to max my 401k so the brokerage is just used for when RSUs and ESPP shares deposit. Then I sell them, put some in retirement and transfer some to CU for cash.
Roth contribution is manual each month. Bill pays are manual (except for a couple on autopay on CCs, if they don't charge card fees). Mortgage is automatic from checking. I track the target emergency savings separately in a spreadsheet which also includes budget & other info.
What makes the Fidelity cash management account & its associated debit card so good?
What makes the Fidelity Cash Management account & its associated debit card so good?
- ATM fee reimbursement - use any ATM, worldwide, and get the fee reimbursed
- no foreign transaction fees - use your debit card for purchases internationally and don't pay an extra fee
The foreign transaction fee thing isn't particularly important to me since I use credit everywhere, but it may come in handy if my credit cards don't work for some reason.
So for me, I don't need to care which ATM I use, I just use whatever is most convenient. They do have an ATM network, but that just saves Fidelity some money.
For me in the Netherlands. I have one bank account, salary comes in, all bills are paid automatically, some money gets automatically transferred into my savings account.
Pension gets taken out of my paycheck automatically as well, so not doing anything special for that. In the rare cases I use a credit card, it will automatically be paid off as well, so nothing really to worry about there either.I have recently bought my own place, so once savings are back to a safe level I'll start to make a monthly investment in some index fund.
Paycheck goes into checking at credit union, where I have a money market account alongside and a ton of auto transfers. Basically any incidental regular expense I've canceled (useless subscription, payment plan, cigarette habit) gets transferred at the rate it used to be. I've been doing this since middle school and it's up to about $1k/mo.
Other than that, PayPal Cash Back card rewards funnel into a high interest PayPal Savings account. I also transfer whatever is over my emergency fund threshold from the money market account into here. When it gets big enough to roll into a higher yield CD, it goes back to the credit union.
Simple setup but it works. I keep retirement in its own separate world.
Total ad for Fidelity.
Guilty as charged, I just wish they'd pay me for it.
I mostly use Vanguard for investments though, Fidelity only has my efund and budgeted money. Maybe one day I'll move my investments to Fidelity, but I really like Vanguard's share structure so I'm in no hurry.