All of the "other" items in my budget are for things that are expected expenses but either I have some amount of choice about when or how much I need of these items or the items needed over a given period significantly vary from month to month. It is all of these "other" items that are budgeted for and spent from within my "safe to spend" number. These are things like groceries, gas, eating out, going to the movies. The biggest chunk of my "other" list is something called Miscellaneous and this covers all sorts of things like the name implies (books, an iPhone app, renting a movie, buying a replacement light switch for the house, etc...).
The other piece of how I budget is by creating other goals for bigger items or things that I know I really want to do and might normally be part of my "other" chunk of my budget but I really want to save something back to make sure I can do that thing in the future.
An example of this would be the external hard drives I needed to use for my home video archiving project. I knew I would need these hard drives over Christmas break because that is when I will be off work and have time to complete my project, so I started a goal several months ago to start saving back a little bit at a time. Simple gives you an option when you create a goal to either save the money all right now (the money immediately comes out of your safe to spend and is put into this new goal) or to save money slowly over time with an end date. In the case of choosing the end date option, Simple calculates how much is needed to be saved each day in order to meet that goal and each day Simple automatically moves that amount out of your "safe to spend" and into your goal.
A different type of a goal example would be saving money back to take my family out to the movies once a month. Normally I would just use money (if it was left to spend at the time) from the "other" portion of my budget, but I really wanted to make taking the family out together once a month a priority. So in order to make sure this always fits within our budget I created a separate goal called "Movies" and I take a small amount out of each paycheck and use that goal to fund our monthly family trip to the movie theater. The great thing about budgeting this way is that it is so flexible. Say there aren't any good movies out we all want to see this month or we are really busy for several weekends in a row. Maybe we all go out for pizza and bowling now instead of seeing a movie. I just make those purchases come out of my "Movies" budget (or "spend from goal") and I've kept that family activity separate from the rest of the budget end ensured I always have funds available for us to go out.
The big difference between how I "tweak" and "fiddle" with my budget now as opposed to how I used to do it is that now I can very quickly just open up the app on my phone and in a tap or two I've adjusted all of the day's purchases so that they are spent out of the correct goal and made sure they are all categorized correctly. I used to spend an our or two every weekend doing this in front of the computer, but now I can do it when I have a few minutes standing in line at the grocery store.
I saved the most important part for last...saving money! I mentioned earlier how I had this long list of items in my monthly budget and after you add all of those items up and subtract them from my paychecks for the month there is some money left (by design). That left over money is for savings. I create a goal in Simple called "Extra" and each paycheck I pull out that pre-calculated amount that I should be able to put towards saving into my "Extra" goal. I also use the "Extra" goal to pull money out of "safe to spend" if I have had to make a purchase for something and pay for it via another method than my Simple VISA card (like a credit card or a personal check from my normal bank account). This way my "safe to spend" stays accurate and still reflects how much I can safely spend for the month. If something comes up that I haven't budgeted for I will "spend" from my "Extra" goal, because that is what savings is for...unexpected things that come up.
Husband and Wife & 2 Separate Simple Accounts
Simple doesn't allow you to have more than one cardholder per account, so my wife and I have separate Simple account with separate Simple VISA cards. So how do we both spend from and track against the same budget? Simple is actually working on being able to link two or more account to the same spending goals and safe to spend numbers, but for now you can't do this. So the way I have set this is up is the following...
- My account is used to pay for all the "Monthly" expenses
- My wife then only has to pay for and track all of the "other" expenses for the month
- I take that "other" monthly category and give her about half of that part of the budget from that paycheck
- Every 2 weeks she is mailed a physical check and the full amount of that check is her "safe to spend" amount for the next 2 weeks
- She then cashes that check and deposits it into her Simple account and she has funds for the next 2 weeks
We each buy varying portions of this part of our budget every month so splitting that part of our monthly "safe to spend" evenly between us is never quite right. So in order to correct it as needed sometime she needs more money one month and I need more money the next. If she needs more money I move that amount out of my "safe to spend" and into my "Extra" and she moves the same amount of money out of her "Extra" goal (which is essentially her saving account within Simple) into her "safe to spend". This keeps both of our "safe to spend" amounts accurate and ensures we both know where we are within our budget at all times. Granted this requires me to actually communicate with my wife about our budget on a regular basis, but I see this as a feature. In order for a budget to work you need to talk about it. Some people might look at what I'm doing by sending my wife a physical check every month and say I am giving her an allowance. That would be true if I just sent her that check and we never talked about it and never adjusted our "safe to spend" numbers as needed. So no, I don't have my wife on an allowance (at least no more so than I have myself on an allowance).
How does customer service work with a bank you can't physically walk into? It works incredibly well. I can either pick up the phone and call someone at Simple or even better I can send Simple an instant message from within the app on my smart phone. The budgeting scheme I described above I didn't completely invent myself out of thin air. At first I was pretty confused about how Simple worked so I asked Simple support some questions via the app and I got some incredibly helpful and detailed answers back that allowed me to come up with the scheme I described above. I've also had to ask support about some charges and holds on my account and every time I received a response very quickly and my questions was fully answered (and in most cases they even threw in extra information I didn't ask for but that information helped me make even better use of the service).
Simple is a very different way to bank, but in my opinion a much better and more powerful way to bank. I know I only skimmed the surface of what Simple can do for you, so rather than try and cover everything I will just refer you to Simple's FAQ page and let them answer questions I didn't answer as part of my post. As always, feel free to post a comment below if you have a question for me.
In summary, moving my banking over to Simple has been one of the best financial decisions I have made. It has given me complete control over my finances and budgeting in a way that I have never had before. Even more importantly it has freed up a large chunk of my time that I used to spend dealing with all this stuff and now I can spend it doing other things. I can't recommend Simple enough...
How to sign up
Simple is still only accepting new customers by invitation only. If you are interested in trying it out I have plenty of invite codes I can give out. Just get a hold of me either via the comments field below this post or via my Contact Page and I will be glad to get you an invite to this amazing service/bank. Just to clarify, I don't get any kind of kickback for bringing people into this service and Simple does not sponsor my blog in any way (in fact nobody sponsors my blog...do you see any ads anywhere?). I am writing about this great service because I hope it can help others as much as it has helped me. It has set me free from the chore of family budgeting!