
Ask HN: What is your financial “setup”? - PascLeRasc
I&#x27;ve gotten a lot of good recommendations for software from this community - most recently AVRFuses and pyenv. These both focus on being simple and &quot;doing one thing really well&quot;. They&#x27;re tools and don&#x27;t require much active thinking to use them regularly, which I really like.<p>I&#x27;m trying to get my finances set up better, and I&#x27;m wondering if anyone can recommend a &quot;setup&quot; of bank account, credit card(s), investment platform, budgeting tools, etc along these lines. Ally Bank and SoFi seem good, as does Wealthfront, but I&#x27;m just not sure if I&#x27;m using them right. I have Mint but it spams me with notifications and I&#x27;m not sure what exactly it does for me. Credit cards feel stressful to think about with keeping track of what to use for what purchase or making sure they&#x27;re all paid off - I recently got a Citi card and the app alone makes me want to get rid of it.<p>Does anyone have a &quot;setup&quot; for how you manage your money that you really like? Anything that follows the &quot;don&#x27;t make me think&quot; philosophy?
======
satysin
The thing that _really_ worked for me was I only ever buy in person with cash.
I almost _never_ use my debit card in person. This simple thing changed my
relationship with what I buy. Obviously my mortgage and other monthly payments
are direct debit but unless the purchase is several hundred Euros or more I
will pay in cash.

I always have €200 in cash on me which is enough to cover me at least a week.
Then whatever I have left over at the end of the week I roll over. So if I
have €60 left I take out 140 and transfer the difference into a savings
account. I have saved a shocking amount doing this. It may seem strange but
budgeting myself 800 for the month and only using cash has really helped me
appreciate how much the money is worth to me. The short of it is on pay day
each month I transfer 800 to my "cash account", I transfer the exact amount I
need to cover my bills into my "bills" account (I also have a "buffer" of 100
in this account as a 'just in case its more than I calculated'). Everything
else goes into savings. Everything.

Obviously some things fall outside the 800 cash allocation for example I
bought a new coat a few weeks ago which was €230. I tried it on in store but
bought it online as there was a discount I couldn't use in store annoyingly.
However I have a separate budget allocation for key clothing items like coats
and boots which I generally replace every other year. However I don't bother
with multiple savings accounts anymore. I never found I benefited from the
added complexity. If in a month or two I ruin my coat and have to buy a new
one unexpectedly I will just take 230 from my savings rather than juggle
things around.

I should say though that all of our expenses come from a single salary. Every
month my wifes automatically goes into savings. Generally we never need to
touch it. This is great for many obvious reasons but it also helps us (well
me!) feel less guilty when I suggest we buy something we don't really need
such as an OLED TV we got a few months ago.

~~~
Hackbraten
How do you feel paying in cash helps compared to cards? I honestly don’t get
it. For me, withdrawing and paying cash simply adds unnecessary complexity,
and on top of that, it destroys any paper trail you may need for tracking your
individual budgets. How come people (mostly in Germany, from my experience)
are so obsessed with cash?

~~~
sneak
This could easily be rephrased as “How come people are so obsessed with using
payment systems with real-time warrantless government surveillance for all
purchases?”

I honestly don’t get it. Why would you pay a percent or two to be surveilled?
It creates a time stamped track log, too, which can be easily cross-referenced
with (also surveilled) cellphone position.

[https://www.wired.com/2010/12/realtime/](https://www.wired.com/2010/12/realtime/)

~~~
perl4ever
Pay a percent or two? Well, _there 's_ your problem. I'm _paid_ 2 percent "to
be surveilled". Plus, it just seems nice to have over a month to pay for stuff
I buy.

~~~
wizzwizz4
A small pot of savings will give you over a month to pay for stuff you buy,
plus interest on the money you haven't saved yet.

~~~
perl4ever
2% cash back on a credit card is worth _twenty five times_ more than 2%
interest on checking (assuming you can even _get_ that).

If you spend $2000 every month, and you get 2% back, then that is $40/month or
$480 per year. You also get from $0 to $40 interest per year on the money you
haven't used to pay your balance yet, depending on the timing of your income
and payment date.

If you don't have a credit card but only a checking account paying 2%, and you
spend $2000 perfectly uniformly over the course of each month, then you are
getting $20 _per year_ interest on an average balance of $1000.

You have a choice of either $500 with a credit card or $20 without. So 2% <>
2%.

------
ioblomov
1\. Consolidate all spending on a credit card that gives cash back. Autopay
all bills that don’t levy fees with it.

Pros: no need to worry about points or blackout dates; maximize cash back;
facilitates budget tracking with annual summaries and integration with
budgeting sites (otherwise you’ll have to do it manually).

Examples: Double Cash 2% cash back, Apple Card 1-3% depending on payment
method

2\. Direct deposit your paycheck into one bank account that your credit card
from 1 and investment account from 4 are connected to (set it up so only
investment account can debit from the bank, not vice versa). Autopay remaining
bills from 1.

Pros: only worry about paying one bill (credit card); only the hub bank
account is exposed, bulk of savings is isolated in investment account.

3\. Max out 401k and IRA every year using automatic deductions from your
paycheck/bank account.

Pros: saving/investing on autopilot; lower taxable income

4\. Consolidate and invest all savings (and roll over old 401k accounts) into
an index fund at Vanguard or Fidelity. Auto-deduct from your paycheck in
increasing amounts until you hit the pain threshold.

Pros: automatic diversification; one place to monitor your investments;
maximum investing on auto-pilot.

~~~
MuffinFlavored
> 3\. Max out 401k and IRA every year using automatic deductions from your
> paycheck/bank account.

> Pros: saving/investing on autopilot; lower taxable income

Does it ever make sense to do Roth 401k instead of traditional 401k?

~~~
dragonwriter
If you are expecting to be in a higher tax bracket in retirement (counting
traditional IRA/401K income) then Roth IRA/401K may be a better choice, since
it is after tax when invested but tax-free when withdrawn. Most workers will
have substantially higher income subject to income tax during working years
than in retirement even with IRA/401K withdrawals as taxable income, but
that's not always the case.

~~~
torstenvl
I disagree with your analysis. Taxes due are going to be less a function of
your income and more a function of tax law. At least in the United States, we
have enjoyed many years of low and lowering taxes, at the expense of ever-
increasing debt, and are likely reaching the limits of what we can expect the
magic of monetary theory to insulate us from. Upshot: tax rates will have to
increase substantially in the medium term.

~~~
jki275
fun fact, tax revenues in the US are projected to not even cover interest on
the debt in the near future.

The concept of raising taxes enough to affect the budget would cause a revolt.

------
jonahbenton
Speaking as someone who works/consults in the financial sector, I'm afraid you
really...should convince yourself...that you have to think about it.

First, the penalty for the strategy of "not-thinking" just on a tactical level
isn't 1-2%, more like a minimum of 10%, and a maximum of 100% or more when you
take into consideration accumulation over time.

Second, from a "strategic" perspective, "not-thinking" leads to "not-
understanding" the myriad "choices" presented/available to you- where often
what's presented is very different from what's available, and often serves
someone else's interest much more than some other available-not-presented
option may serve yours.

Third, the state of "not-understanding" leads to the use of seemingly helpful
services like Mint. In doing so you are making an enormous sacrifice in terms
of privacy. There are rules that prevent the state of your deposit/savings
data from being shared by the custodian (many more than the state of your
credit data, for hopefully obvious reasons). To use those services you have to
provide them with your deposit/savings credentials, and once they have them,
that data gets out in the wild, which can have unexpected deleterious effects,
particularly if you are a person of color, or a woman, or wind up in a weak
financial position, which may happen for unexpected, surprising reasons.

The financial industry is predatory. Full stop. The industry harvests from
people who choose to not think about it. There is so much- too much- money in
the world, but to everyone individually/organizationally it is a scarce
resource. Every day I see grim occasion to think about apex predator Danny
DeVito in a David Mamet movie called "Heist"-

"Everybody needs money. That's why they call it money."

Good luck!

~~~
enhdless
Do you have any pointers on how to start thinking about all this? How should
one get started?

------
tra3
YNAB ([https://www.youneedabudget.com](https://www.youneedabudget.com)) for
budgeting and tracking spending. It forces you to pre-allocate your funds
which ensures that you don't overspend unconsciously via credit cards. I've
been very successful with it.

> Anything that follows the "don't make me think" philosophy?

I don't think that exists. YNAB requires pretty diligent tracking, but the
payout (heh) is huge.

~~~
bszupnick
I second YNAB, but as you said, it requires diligent tracking especially for
those of us living outside the US and can't hook their bank account into it.

I happen to love the diligent tracking, though, and it's just part of my daily
routine. Every time my wife or I charge a card or the money from the ATM, we
log it in YNAB. Then every day I open my banking app and reconcile the charges
with what we've input into YNAB. Sometimes we forget to log something, or mis-
log something, or there are surprise charges to be dealt with.

Now that I'm in the habit, it takes a total of 10 minutes a day.

~~~
jlengrand
I'm hoping the arrival of PSD2 in Europe early this year will finally mean we
get apps that will be able to auto report as opposed to manual accounting like
it has to be done today

~~~
mping
There are some fintechs already paving the way and abstracting psd2 away. I
just tried to log into my bank using tink (no affiliation) and it worked
great.

~~~
jlengrand
I'll have a look! Being a French guy in the Netherlands and with money spread
over 4 different banks in several countries, bookkeeping really is a pain. I
looked a few times in the past but support is notoriously lacking in NL.

------
alexmingoia
My radically simple approach to finances is a result of simple living. I spend
maybe 1-2 hours a month thinking about money and finances.

\- I don’t budget.

\- I don’t use spreadsheets or finance apps.

\- I don’t have any credit cards, loans, or debt. I don’t care about my credit
score because I’m not ever going to get a car loan, electronics lease, or
mortgage.

\- I don’t own a car. If I did I would buy it with cash and purchase only what
was necessary to get from point A to point B safely, with the best gas
mileage.

\- I have reduced expenses as much as possible, and only buy essentials: Rent,
utilities, health insurance, and groceries. I don’t spend money on new
gadgets, entertainment, or other things. I read books from the library, I go
to the park instead of the movies, etc. I don’t go “shopping” whether online
or offline. I don’t buy a new laptop or phone unless my old one breaks and
cannot be easily and cheaply repaired (still using MacBook from 2014).

\- At the beginning of the week I go to my bank and withdraw cash, and only
buy things with this cash. I don’t buy much online except toiletries and
cooking oil.

\- Instead of budgeting food, I have a simple rule that if I’ve eaten out
already in that week, I avoid eating out until the next week. I avoid buying
groceries until I’ve eaten most of what’s in the kitchen.

\- At the end of every month I log into my bank, check how much money came in,
and subtract how much went out. I then invest whatever I feel like out of that
month’s profit into a mutual fund. I choose mutual funds as my method of
saving because they are liquid, free of management, and simply taxed (capital
gains). I have them setup to automatically reinvest earnings. I don’t use
IRAs.

\- I’m happy with my income now, but in the past when I felt like I didn’t
have enough money, I simply focused on the easiest way to earn more money
(changing jobs, learning a new skill to change jobs, taking another job,
etc.).

~~~
dmerrick
I was with you until you mentioned you don't use IRAs. Tax advantage is
important!

~~~
alexmingoia
I don’t use IRAs mainly because they aren’t liquid. I can’t withdraw without a
penalty.

An IRA is not necessarily tax advantageous because gains are taxed as income
when withdrawn, which is higher than capital gains. The choice to use IRAs is
not straightforward. It's also hard to plan for any of this because tax rates
can and do change. Capital gains and income tax rates may change, so I
generally prefer to pay taxes earlier than later where possible.

I have generally found it more financially rewarding to focus my time on
increasing income rather than on finagling my finances to save money. Same
reason I don’t own a credit card just to get the cash back or other
incentives.

~~~
newnewpdro
> I have generally found it more financially rewarding to focus my time on
> increasing income rather than on finagling my finances to save money. Same
> reason I don’t own a credit card just to get the cash back or other
> incentives.

Diverting some of your income into a tax-deferred investment account will not
significantly affect your ability to focus on increasing income.

They're not mutually exclusive.

My approach largely resembles yours, but there's no effective difference
between increasing income and reducing how much of it is taken from you in the
form of taxes. If your priority is to increase your income, deciding to throw
some of it into a tax-deferred investment account can be seen as a very
efficient use of your time spent increasing your income.

~~~
alexmingoia
Tax deferring doesn’t necessarily equate to reduced taxes. IRAs just mean
paying taxes later, at an unknown rate.

All income from IRAs are taxed, principle and gains. A traditional IRA has
gains taxed as income, which is higher then long-term capital gains on ETFs.
Assuming tax rates don’t change, a traditional IRA will cost more taxes if the
withdrawal and contribution taxable income is over roughly 40k, correct me if
I’m wrong. That’s assuming income tax isn’t higher in the future, which is
quite a gamble as historically income tax has been going up, and historically
there’s just been more and more taxes.

Don’t forget that deductions for contributions don’t matter, because you will
pay income tax on that principle when you withdraw. If tax rates increase, the
tax cost of deferring could be even worse. It really depends on if you’re
going to be earning income when you withdraw and how much is going to be
withdrawn. It’s complicated and practically impossible to estimate total final
tax obligations at retirement. IRAs are not a cut and dry “just put money in
an IRA” decision.

Another problem with IRAs is the lockup. If you withdraw before retirement
there’s a hefty 10% penalty unless it’s for a mortgage or health insurance.

~~~
newnewpdro
Aren't you ignoring the advantage of being able to invest the money you would
have paid in taxes for the entire time you've left it all in the tax-deferred
account?

I don't get why you're assuming you'll have to withdraw the money prematurely
and incur the penalty. That's a rather pessimistic attitude, and it's not like
you'd be putting all of your investment funds down this path.

~~~
alexmingoia
You have to withdraw at some point (after age 59-1/2 unless the law changes),
and you’ll pay income taxes on principle _and_ gains then. Taxes on principle
will be paid either way. If you give to your children, they will pay taxes on
the principle + inheritance tax.

The idea with tax deferral was that when you retire, your fixed withdrawal
income will have a lower income tax rate than when you contributed, but as
capital gains and income tax are now, that isn’t necessarily true depending on
your contribution and withdrawal income.

Roth IRA was then created as a response to the well founded concern that
income taxes will rise negating any tax advantage to deferral, but Roth wasn’t
able to pass the legislation without severe compromises like contribution
limits, and gains taxes as income on withdrawal.

~~~
newnewpdro
You pay tax on it _eventually_ , like you said with the lower tax rate when
your income will be presumably lower.

But in the mean time, which can be a very long time, you're free to invest
those deferred tax dollars. That can add up to a significant amount, over a
large number of years.

It's not something to trivially dismiss.

------
6510
My "system" works on gut feeling. I live in the Netherlands. Everything is
paid automatically, I only buy things I need, I only use my bank card which is
accepted everywhere, I don't really pay attention to what shopping cost.
Online purchases I make using Ideal. Every 6 months or so I log in to check my
bank balance to see if I'm spending to much or not enough money. I could make
luxury purchases but I prefer ignoring finances. I never happened but if
things get "out of hand" I would negotiate unpaid leave. 1 day per week is
perfect. (I also spend my vacation days like that.) I only work 3:7 days, if I
take a day off it leaves only a 2 day work week. It's a pretty hilarious
formula. I might need software to avoid getting lazy.

~~~
mig4ng
Are you self-employed? If not, how did you negotiate 3:7 work week? Any tips
to someone who values work-life balance and want to try negotiate 4:7 instead
of the current 5:7 standard?

~~~
6510
There is a legal limit to the number of night shifts. Employers may chose
either to have employees work a maximum of 140 night shifts per year or a
maximum of 38 hours of labor between 0:00 and 6:00 every 2 weeks. (the
mandatory 30 min lunch break is not labor)

But I do have an idea for your negotiations. I notice that people who also
work day shifts and work 5:7 are tired all the time. If they push themselves
either at work or in their private lives the weekend is to short to recover.
They just gradually burn up over the year, go on vacation and look 10 years
younger when they return.

I can push myself to [measurably] be more than twice as productive during my
shifts for 2 reasons: 1) I don't have to worry about wearing myself out, on
the contrary, I make an effort to wear myself out completely for the sports of
it. If I don't recover in this weeks 4 day weekend I certainly will in the
next.

And 2) Because I'm pushing myself and I take time to recover I'm building up
endurance rather than slowly decaying. Working as hard as I can is actually
beneficial.

Consider what it means: I do 6 days of work and they do 5.

During my 4 day vacation I'm available for messages and phone calls and they
call me to fill holes in the schedule. If they call the full time employee he
is very unhappy with the request (to put it mildly) and he is only "available"
for 2 days.

It doesn't happen very often but if they have to work 2 weekends in a row
their productivity gradually drops to something like 40%.

At that point I'm doing 5 times as much work as my coworker. That difference
is so ridiculous I think it makes for a fine argument.

~~~
mig4ng
Thanks for the awesome explanation and time put into it :)

It seems that you do not work in the software industry, correct me if I am
wrong.

Do the night shifts affect your sleep schedule or you have adapted it to
better fit your working needs?

~~~
6510
I failed to mention I do physical work because writing software wears me out
much faster. I see no reason why it wouldn't work the same way. Brain/Desk
work (at least in my experience) is not limited by Newtonian mechanics.

It would depend on the kind of job but I imagine it is worth testing if you
are more productive working 4 days, or 3. Perhaps one can just be there for
meetings? Maybe you can do some stuff to build up the goodwill, from what I've
seen there are companies that actually care about the end result and praise
employees willing to run the extra mile to make it all work. An overworked
managers should be able to understand that you suspect to be more productive
working fewer hours? Could ask him on Friday and point out some examples on
the work floor.

I can sleep when I want and as long as I want. 14 hours is not a problem. It's
required for recovery. The day before a shift I stay awake till 3:00 am-ish
and sleep at least 7 hours. Its great for me.

------
smarri
I have;

1\. One account for salary and bills

2\. One credit card for large purchases and spending online which I pay off
each month

3\. One pre-paid card which I top up weekly to use for daily spending and when
travelling (as it has multiple currency accounts)

4\. One savings account

(All of the above accounts are available to me on one App, due to the Open
Banking regulations in Europe)

(Would be a good idea to set up auto sweeps to move funds between accounts, so
that it's automated. I don't do this as I like to view the accounts regularly
to stay on top of things)

Rules I try to follow are;

\- Maximize income \- Minimize expenditure \- Save or invest the remainder \-
Don't use credit/debt but save up to buy what you want

I don't have a go to investment platform, but my preference would be to use a
broker and value invest for medium to long term. I can't compete with pro
traders and algorithms.

~~~
herrvogel-
How is the app called, that you use for your accounts?

~~~
smarri
Herrvogel I bank with a large bank and their app connects to other account via
APIs

------
psv1
Important features of any good setup:

\- you consolidate your finances in the minimum number of accounts & cards

\- you have a couple of months of expenses as cash in a current or savings
account

\- you pay off your credit card in full every month

\- you invest some amount every month

\- all of this is automated - paying bills, credit card repayments, investing,
putting money in savings, all of it.

Once you have these things down, you can then adjust percentages, providers
and all other details according to your personal situation and preferences.

~~~
thatfrenchguy
I've automated everything except paying bills and credit card payement: I like
feeling that money going away.

~~~
sokoloff
I automated specifically after getting a few stupid late fees in my 20s. At
this point, if it’s not automated, I’m at least 25% likely to be late.

Fortunately, there are only a handful of small bills that I have that aren’t
automated. They’re annoying.

~~~
hootbootscoot
I noticed a 15 euro charge to "Jet Multimedia" on my internet bill one month,
and made a point to not direct-debit anything due to the simple fact that a
leachy parasite game co. (I've never played a game in my life) was able to
latch onto my internet bill somehow.

Allegedly I signed up for this, but they could neither produce my signature,
nor could they explain the mechanism by which they are allowed to agglommerate
onto my internet bill, and a quick call to the ISP removed this surcharge, but
wisened me up to how utterly cheap and tawdry an ISP could be.

Direct Debit had best be reserved for actually trusted actors.

------
binwiederhier
I know I'm late to the party, but I can highly recommend the Bogleheads
philosophy [1] and community/forum. They have a wonderful set of videos that
explain how to build an emergency fund, and how to invest in a tax efficient
manner.

I've been following their philosophy for a while and it's been nothing but
positive and very hands off:

\- Emergency fund in a BofA account

\- Schwab account with a lazy 4 fund portfolio [2]

\- 401k with company match

\- I am also working towards financial independence (FIRE), see [3]

[1]
[https://www.bogleheads.org/wiki/Getting_started](https://www.bogleheads.org/wiki/Getting_started)

[2]
[https://www.bogleheads.org/wiki/Lazy_portfolios](https://www.bogleheads.org/wiki/Lazy_portfolios)

[3]
[https://reddit.com/r/financialindependence](https://reddit.com/r/financialindependence)

------
fersho311
I don’t know anything about financial engine but I do have a cautionary tale.

I pay poor people, teach them coding and help them move into middle class. I
spent Most of my money doing that. 10 years of Bay Area swe pay, I only have
$2k in my bank account. (Currently negative because of cc debts and holiday
shopping).

Don’t be like me. I originally thought if I helped others become as wealthy as
me (relatively) they’ll be able to lend me money whenever I end up in hard
times. Turns out, most people don’t save up and instead just end up spending
more. Their relatives suddenly appear with “investment opportunities” etc.

So now I’m just as broke as the other guy. The only bright side is I got to
meet and marry another swe through doing this and our combined TC is over
600k. We plan to put everything we earned into a savings account, by a house
next year and retire a few years after that.

~~~
jki275
You invested in other people's future. That doesn't seem like a bad thing, and
it seems like you could afford to do it.

Don't beat yourself up over not having a lot of money in the bank, it seems
like you've still got your financial life mostly in order.

I often have to remind myself of this, as I send a significant amount of money
to another country to help my spouse's family -- It's a significant amount for
me, but it's generationally life changing for them to be able to get advanced
education. Doesn't really make me feel happier when I look at my bank balance,
but there are other things that are more important than a bank balance.

~~~
travisjungroth
> it seems like you could afford to do it

They have a negative net worth. They could not afford to do it.

~~~
jki275
While perhaps pedantically true, he just said he’s got RSUs and certainly he’s
got a 401k and probably other savings if he’s making 300k a year.

You could look at my bank balance and make the claim that I’m “negative net
worth” too, but it wouldn’t be accurate because that bank balance doesn’t tell
the whole story.

------
grecy
Pay yourself first.

Setup an auto transaction to move a set amount into a savings account on
payday - that way at the end of the pay period when you run out of money,
you've already saved how much you wanted to. If you wait till the end of the
pay period to save, there will never be any left.

My trick is to increase the amount going into savings every time - just a
little. Eventually you'll find the point where you're saving the most you
possibly can, and you might need to back it off just a touch.

This maximizes my savings to the point where I work for a couple of years,
then I can take years off and drive around the world.

Rinse, repeat.

~~~
astura
>Setup an auto transaction to move a set amount into a savings account on
payday

Better yet, go to payroll and have them split your check, $x or x% in savings
and the rest in checking. If you do it by percentage then your savings will
grow in proportion to your income.

~~~
inetsee
As good as this idea is, I suspect that relatively few payroll departments are
set up to provide this option, and most of them would resist going to the
extra effort to provide it.

~~~
astura
What? All the major payroll processors/front ends (ADP, Paychex, PeopleSoft)
support this "out of the box," no problem whatsoever.

Even when my employers was on paper forms for direct deposit there was always
an option for multiple bank accounts.

I've never NOT had my paycheck deposited into a multiple accounts except for
when I was a teenager at my first job.

~~~
kiwijamo
My employer’s payroll charges a fee for each additional bank account that they
are to pay into.

------
puranjay
My setup wouldn't work for the majority of people, but I freelance and have
set up a corporation. I pay myself a salary that's about 2x my rent. The rest
of my funds stay locked in my business account.

This forces me to limit spending. After paying rent, I only have about the
same amount left over for personal expenses.

Any money left over in my personal account at the end of the month is
transferred into a mutual fund.

~~~
btrettel
What are the advantages and disadvantages of this setup?

~~~
puranjay
I can't really speak to the financial or tax advantages of this setup - I've
never been particularly good at these things.

But the big advantage to me is behavioral. If I have just a limited amount of
money to spend in my account, I spend, well, a limited amount.

It's simpler and thus, easier to stick to than complicated rules that require
more fiscal discipline

------
Jemaclus
I highly recommend the book "I Will Teach You To Be Rich" by Ramit Sethi. It's
an easy read and is a pretty fool-proof way to set up your finances. Any
moderately successful person would probably give you the same advice, but the
book lays it out in easy-to-read terms.

The gist of it is to automate everything as much as you can! Auto-pay, auto-
deposit, etc.

------
ttcbj
We have a checking/savings account, and then various investment accounts at
vanguard.

All income goes to vanguard. Each year, we move our total budget for the year
to checking. Then, we pay for all spending from checking. We can easily track
whether our budget is on Pace at any given time. If we run out of money, we
went over. (Technically, we subtract out year end expenses like property taxes
to avoid a year End surprise.)

We also have a 30 year budget spreadsheet that estimates our savings,
expenses, and income Up too retirement. If we exceed or income goal for the
year, we put half towards retirement and half towards a virtual 'bonus
discretionary' account. If we exceed our annual budget (have to do an extra
transfer from. Vanguard), we deduct that from the virtual bonus discretionary
account.

Note that I wouldn't recommend exactly this approach unless 1 years spending
is a relatively small amount of your net worth. We only started this technique
in our 30's.

~~~
thoughtstheseus
You should consider keeping the unused/not yet needed annual funds in a high
yield savings and do monthly transfers, excess cash in a checking account adds
up. Sounds like you have a good system regardless though!

~~~
astura
Maybe.

Some checking accounts give high interest rates (rewards checking, Sofi,
etc.). Plus there's fidelity cash management that acts exactly like a checking
account but you can invest the funds in money market.

------
allanrbo
I really like Beancount with Fava for analyzing my spendings:
[https://github.com/beancount/fava/blob/master/README.rst](https://github.com/beancount/fava/blob/master/README.rst)

~~~
f00_
I have been starting on the road to putting all of my transactions into
beancount, pulled ofx data for chase and scraped pdfs for another bank
account.

The idea of keeping records of everything is satisfying, but still need to do
it.

Could you give me some details about how you started? I've glossed over the
docs once, but hopefully I can just import everything, name it properly, and
view it on Fava.

Is it possible to automatically generate tax documents?

------
axaxs
I don't have a simple setup, I optimize everything. Everything, and I mean
everything, is paid for by credit card. You get rewards, and more importantly,
protections that aren't afforded to you by paying other means. Some even offer
extended warranties, and price drop protections. Do your own research. I
typically use cards to average around 3 percent back, between Amex, Discover,
and Capital One.

I keep my emergency fund in Varo. It gets 2.8 percent interest. I use SoFi as
my main "bank", but also have a couple local accounts. Good luck.

------
blablabla123
Striving for low complexity and high flexibility:

\- low fix cost per month

\- should be possible to cancel subscriptions within a month

\- rather rent than buy (flat, car sharing etc.)

\- no loans

\- money to save goes on a saving account

\- define low limits for max. amount of money to withdraw on accounts

\- get proper insurance coverage

\- avoid Paypal and other 3rdparty banking services

No need for any fancy tools and I have more money available to put away than
ever. I only use a tool for my tax declaration, but since I simplified my
financial setup so much I could even do it without a tool nowadays...

------
pacificenigma
I'm in Australia so have fewer options than many others here.

We use a mutual bank for most of our transactional banking. We have several
companies, trusts and superannuation (think IRA) accounts there.

My wife and I also have a joint account at a commercial bank. This is solely
used for personal purchases on a debit card. The account has no international
fees, which is unusual for Australia.

We use Ledger CLI to automatically ingest all transactions each day. I wrote a
scraper for the mutual bank and commercial bank (needed to OCR the PIN pads
they like to jumble around). This gives us great visibility into all
expenditure and origins of funds. My wife and I get a daily email with PDF
attachments for our various entities.

We use Interactive Brokers for most investments, along with IG Markets to
mitigate some counterparty risk. We've mostly retired (thanks to a startup) so
most of our wealth is held in there. I use IB's FTP delivery service to
receive detailed daily account statements (with GPG encryption). I also use IB
API to do some algo trading.

We also have some crypto with 5 different exchanges given we don't trust any
of them so it's straight-forward counterparty risk management. These are also
algo traded.

We avoid cash use because it doesn't auto-categorise into Ledger CLI. I wish
we had more privacy but by spreading things around between the banks, brokers
and exchanges no single institution has any real clue about us. Sure the
government does, but they get that all the important info freely anyway via
tax returns or simply asking nicely.

It's all reasonably automated, but I have to shuffle money around each quarter
or so.

------
aliceryhl
I mostly just have two accounts: a private and a shared account.

The shared account is very simple: Every month me and my boyfriend tops it up
to 5000 USD, we have a debit card to it each, and all shared expenses
including rent come out of this account. By topping it off to a high number
like this, we ensure we wont run out within a month, and we just use the debit
card for things we need.

For my private stuff I have a credit card that I pay everything with, and I've
set it up to be automatically paid off at the end of each month.

Every so often I write the expenses we've had into gnucash so I can see how
much we're spending, but I don't budget in advance.

I also have a savings account with some emergency money, but I'm a poor
student so I don't really have money to invest or for long term savings.

~~~
samoa42
> but I'm a poor student

with savings, a personal and a additional 5k usd checking account... sry to
burst your bubble but thats called wealthy for most ppl on earth.

~~~
Rondom
5000 USD seems high to me as well for a student and you don't know what his
girlfiend does. It does not really matter how high that amount as long it can
cover unexpected expenses.

When I was a student, I made sure I always had at least 1000 EUR on my
account, basically treating the 1000 as 0. I cannot remember ever running into
debt this way.

------
csomar
I struggled with this before but then I found Banktivity. I have dozens of
accounts/cards/debit/credit/savings/investments etc... and Banktivity helps in
keeping track of my overall "wealth".

The way I do it is to budget a yearly (or half year) expenses beforehand and
then channel it through whatever account for expenses. I'm lucky enough to
live in a very cheap place and make enough so I don't have to live pay-check
to pay-check.

If I make more than I think enough to cover my next period, I usually spend
that on a new Tech gadget, Travel or into savings. But I rarely save these
days as I'm trying to maximize my lifestyle before I'm 70 year-old with too
much money and little to do.

------
nknealk
Several here have mentioned Charles Schwab. I personally use them for
brokerage + IRA + checking + savings. It gives me a single view into my
finances.

Why Schwab? They have outstanding customer service. One time I was traveling
on Christmas Eve and forgot to place a travel notice on my cards. I called and
got a human on the line immediately. This is the norm with their customer
service whom I rarely call because 99% of what I want to do can be done via
their web site from download tax docs to ordering new checks. Also, when
traveling abroad they (1) still fulfill their promise of reimbursing all ATM
fees and (2) give an excellent exchange rate. I could not be happier with them
as my bank.

~~~
twunde
I'll note that they now have a calling tree and it's harder to get a person on
the phone. This is fairly recent, in the last year or so I think.

------
nkkollaw
I have 6 accounts:

A for income, ex. when I get a check I put 80% here

B taxes, when I get a check I put 20% here (taxes in Poland are 18%)

then:

C for business expenses, I know how much I spend each month, and I wire that
amount each month from A

D personal account - whatever is left in A after business expenses, I wire
here

Finally:

E, joint account with my partner, I know how much we spend each month and I
wire that from D -> E

F, saving account for myself. Whatever is left in D at the end of the month, I
put here

ING lets me manage all these accounts from their app, and wire money instantly
from one to the other. All these accounts cost about $2/mo. each, but if
there's enough action (ex., if you spend at least $500/mo.) the price drops to
0.

This setup is useful to not go splurge every time you get paid.

------
godzilla82
I know it is a difficult ask for commenters to tell where they are from, but
most answers wouldn't make sense unless that information is given. I would
have completely different money management principles if I lived in SF bay
area or in a developing country. Also, the state of the economy __matters a
lot __. If you lived in a country with 6+% rates of inflation, you would have
completely different future planning than say in SF bay. Also important is
taxation and rebates in your region. But I am pretty sure you are in SF bay
area, as are most other commenters here, so I will excuse myself as I have
nothing useful to advise.

------
ccwu_on_hn
I don't think there is a "the setup" that universally works for everyone. As
much as product makers would like to believe there solution works for
everyone, it depends on their circumstances. I have to be brief to make the
train but here are some tools (US Focus):

1) Are you trying to get in control? This is where you are constantly living
paycheck to paycheck, and bouncing checks. Than I would do the following a)
Get in the habit of saving where it is painful to spend. So start putting any
percentage of money into a 401k if your company offers it. Ideally target to
get the maximum match. But whatever you do start. b) Start documenting all,
let me re-iterate, ALL your spending big and small. I recommend Quicken, but
an Excel spreadsheet, google sheet works as well. The act of becoming
conscious of your spending makes you reflective.

2) You are in control and saving a little bit and bonus you pay your credit
card balance in full each month. Here the goal is becoming more optimized (I
didn't say optimized). a) Choose a bank that tracks your spending and look at
it and automatically pays bills. b) Start putting away money in something like
wealthfront or betterment (I prefer the latter). Put it in a 401k or tax
deferred vehicle to start since it will reduce your taxes. c) work on
eliminating leakage (services you don't use, unnecessary fees etc).

2) You are in control, think more in terms of building wealth. a) Start
thinking in terms of applying savings to appreciating assets (homes and
eventually second properties for cash flow). Zillow and Redfin allow you to
understand the market. b) Look at becoming more aggressive with investments.
Look at a percentage to go to growth or dividend funds. But look for a goal of
secondary sources of income. Both Schwab and TDA have good platforms to see
this.

jonahbenton is right, there is no set it and forget it, but there is get the
max out of the time you do when you have to look at it. You have to reconcile,
with so much digital theft it is easy to have funds leak because of fraud.

If you are truly looking for a set and forget, get adopted by a wealthy person
who will set up a trust fund for you, but full all others, internalize good
money habits.

------
conta
I have built myself a expense tracking tool, where I track my expenses. I have
one "account" for my expenses and another shared one that I use together with
my girlfriend.

I input expenses manually and each expense has a "category". For each category
I can set a monthly "Bucket" (the maximum I wanna spent) and then I can track
my progress during month.

Every month I get email with spending stats and I sit down together with my
girlfriend to consider our finacial situation. We can change the buckets,
etc...

I think the most inportant part is manually writing expenses and then talking
about it after we get the email.

------
PMalhotra
A financial setup is very hard. You do not get the capital easily and you have
to go through a long legal procedure for the setup and incorporation of the
company. There are many laws which you must know before investing and which is
necessary to know for further working. If you are establishing a Pvt Ltd
company, then you can visit the link [https://www.taxolawgy.com/pvt-ltd-
company-registration/](https://www.taxolawgy.com/pvt-ltd-company-
registration/) for the best possible information and capital gains.

------
rayhendricks
This is my non-business (personal) finance setup.

I have a checking account, vanguard account, and fidelity account. The
checking account is used for business to pay me. The vanguard account is 100%
VTSAX as is the fidelity has account. I’ve just been keeping a couple thousand
I the checking and rolling into VTSAX. Should be enough, if VTSAX tanks we
need to be buying ammo if anything.

I also churn credit cards. Chase sapphire/capitol one savor/Amex platinum
should all get you $500 or more. But if you are making >100k like it seems
most people in here are then this is not such a large concern.

------
stevenicr
Does anyone have a method for setting a rule, when random-amount deposits into
account, take 30% and move to other account? The amount changes every week, so
it needs to be percentage not a static number.

Seeing some interesting things in this thread, may be that some of them are
normal for Europe or what have you.

Other things talk about automatic this and auto that - but not specific about
what makes it automatic? You bank web site?

Interesting just thinking about how some of these things are working, and if
there are business account type solutions that are similar.

------
crisopolis
Since I got in a lot of debt with credit in the past. I don't have much credit
now and majority is being paid off. So my financial setup is rather simple,
always slide the debit instead of the credit.

Charles Schwab is my main bank <3, broker and 401k investment holder (employer
forced).

Local credit union finances my car loan (almost paid off), my secondary
checking/savings and my only credit card.

CashApp for any type of sharing/transfer of funds.

YNAB does all the budgeting. (I've become better at spending money that I
have!)

------
DesiLurker
I use personalcapital.com to track accounts, investments and cards. they try
to get you to use their expensive investment management, ignore that but
besides this its pretty good.

------
torstenvl
I use USAA for everything. I have a spending account, a billing account, a
savings account, and a mutual fund. I also have TSP (like a 401K).

Every month, I put $600 into my TSP, $1000 into savings, and my total bill
amounts into my billing account. The rest goes into my spending account.

Whenever I get tempted to buy nonsense, I ask whether I'd rather buy that or
put that money in my savings. If I don't really need it, it goes in savings.

When savings gets over a certain amount, I transfer a chunk into my mutual
fund.

------
hirves_lot
I put fixed sum to loan account to pay off the bank debt each month (amount
may vary on some months, it's flexible so I can put 0 - 9999€ per month for
example), then move majority that is left to "pseudo-savings" account which is
only used to pay maintenance fees etc. and also 1-2 times a month to move
spending money to everyday account (in case of theft i only keep small amount
in account linked to debit card).

------
MaximumYComb
After I get paid I split my money into two accounts - the first account is a
discretionary account that I will use to live off for two weeks. I can spend
this money on whatever and it is meant to be exhausted. The second account I
keep a buffer (for me that means $2000) and I pay any bills I have. Any excess
over $2000 goes into index funds.

------
vlucas
If you want to budget things your own way in a spreadsheet, check out
BudgetSheet: [https://www.budgetsheet.net/](https://www.budgetsheet.net/)

It imports all your transactions into a Google Sheet via Plaid, and it's free
to try out with a single account linked.

Disclaimer: I made BudgetSheet.

------
dave333
Spreadsheet with one sheet per year and one row per day and one column per
account or category. Use bank bill pay and schedule payment when I receive a
bill or auto-schedule for fixed items. I only worry about the daily balance
when it goes below $1000.

------
Rerarom
I don't manage money - I just try to live with as little as possible. I have a
nice salary at the moment, but it's gonna go down significantly next year as I
am relocating, so I want to have loads of savings.

------
Havoc
Good salary and modest needs basically.

So whenever I look at the balances on my cellphone and there is "too much" I
flush it out to an investment a/c

And when I get a bonus same

So very little active managing tbh.

------
Aqueous
building on submitters question: if y’all don’t want to give services like
Personal Capital access to pull transactions in through apis, which often
involves giving them your password (!) rather than properly giving them access
through something like OAuth since many smaller (and even large) banks don’t
offer it, what do you do? I still want the benefits of pulling down all
transactions into a centralized location

~~~
ianlevesque
I forget the article but someone had the genius idea of turning on email
notifications for all their accounts and scraping the emails instead of
dealing with aggregators.

------
jijji
what has worked for me is in all the different businesses I do, all that comes
out of it, the profit, gets invested into real estate. banks and mutual funds
offer 8% returns, however at least the way I invest I get about 100% return on
my money every year for every dollar invested. I look for houses that are not
for sale and negotiate with the owners and I usually buy houses for 1/5th to
1/3rd of what they are worth. Then I split them up and rent the rooms similar
to like house hacking, but on a larger scale. I have managers collect the
money and put it into the bank every week and so Im not that involved in it,
its a long term investment. Then i refinance the house for what its worth and
use the cash to buy more similar properties. I look at property as a good way
to invest money that you have aquired, similar to a savings account, but the
investment grows and you eventually can use the profit from your real estate
rentals to buy more property, i.e. it runs by itself. For example, last year I
paid $50k for a 6000sqft commercial building that was going to be torn down, I
negotiated the price with the owner based on the vacant land value, and then
after a construction permit was opened on it the building is no longer going
to be torn down, then i refinanced it a year later for 400k which is what it
was worth, and the rental income on this property alone is 15 bedrooms times
160/week or $9600/month, which paid back my initial investment in less than a
year but i also got the refinance money...

------
deedubaya
I’m currently demoing Tiller. It aggregates all your financial data in a
spreadsheet.

The jury is still out, but so far it is good.

~~~
apearson
I’ve been using tiller for a year now and it’s so nice

------
twodayslate
I’m a big fan of Prism
[https://get.prismapp.com/2Y0S3GK4C2](https://get.prismapp.com/2Y0S3GK4C2)

------
tictacttoe
_Banking setup_

I use a credit union for checking. I'm currently planning to open up a second
checking account with the same credit union to split my income stream into
fixed and variable expenses as some have mentioned here.

General idea is as follows:

1) Deposit income check each month into checking account #1. Draw from this
account for monthly and yearly expenses. Add some buffer so as not to over
draw.

2) Initiate an auto-transfer from checking account #1 to checking account #2
after check is deposited each month. Work within the budget set by checking
account #2 for variable expenses.

Why use a credit union? A for-profit bank does not share the same incentives
as their clientele. If they can separate you from your money, they will. I'm
generally wary of any industry that is rewarded financially for stealthily
screwing their customers, e.g. insurance industry. Credit unions are also
known for having very reasonable loan terms.

Why two checking accounts? It's nice to know what I'm spending each month on
stuff like gym membership, streaming music, cellphone bill etc, versus things
like coffee and dining out.

 _Investing setup_

I'm young. I'm willing to incur risk for better long term returns (on
average). I also recognize that I am not Rentec. If I were to outperform the
S&P500 picking stocks, it would be almost entirely due to random chance.

I keep enough money in checking to survive an emergency that requires
immediate access to funds. Everything else that I earn above what I need for
the month goes straight into an S&P500 index fund. Both Vanguard and Fidelity
are essentially fungible.

I'm open to others convincing me that this is a stupid strategy. It is
entirely possible the S&P500 tanks, and I lose a large fraction of my money.
Few counter points though. First, it is by definition a diversified portfolio
of stocks. Second, it has performed very well historically. Third, it has
enough people invested in it that it couldn't just "go away" without serious
repercussions for the US and the world.

Perhaps the largest concern, is that there is way more wealth in the S&P than
there are people actually trading it on a day by day basis. If there was a
flash crash, there simply wouldn't be enough people on the buy side of the
equation to drink from the firehose of people selling. This is really beyond
my depth though so I'll stop here.

 _Other principles_

I'm trying to avoid debt like the plague. Mostly for my mental health; I know
it can be important to your credit score to carry some continual debt. Be wary
what you sign up for (college, grad school, etc).

Keep in mind though, you always want to maximize your net effective interest
rate. If your student loan rate is 4%, consider paying the minimum on your
student loans and put the difference (what you would have paid) into the stock
market. Only do this if you can automate the process as you will be inclined
to spend the money and not save it.

