I Found the Hairbands and Saved Money!

Sarah over at The Yachtless wrote a poignant piece that was featured on Rockstar Finance called Small Things about losing hairbands and tracking your spending. This is a response to that awesome blog post.

Hey Sarah, Maggie here.

I’m just writing to tell you I found them! Yes, ALL the hairbands.

This was a pretty big week for me. Mr. T and I cleared out our bathrooms and our kitchen cabinets. Both of these things we figured would take a couple of hours total, but they ended up being a much bigger deal than we anticipated. I was in that bathroom for hours. And, just as you supposed, every dark corner hid at least a couple of hairbands.

But let’s move to the kitchen. Do you know what those dark corners held? Bag clips! You can never find a twist tie or a bag clip when you need one, and that’s because, just like the hairbands, they run away into the dark corners of the kitchen. You mentioned wondering what it might look like to see all those hairbands in a pile. Well, let me just tell you that all those bag clips in a pile was quite impressive.

Bag Clips

You made the parallel to tracking your spending. You realized that you may be seeing how those lost hairbands of your finances are getting lost. I made a similar realization this week with the lost bag clips of our finances. As you know, our only debt is our mortgage and we’ve been actively tracking every penny for a few years now. But at the end of the month, it’s tough to find all the money to transfer to savings. As I pulled out hairband after hairband and bag clip after bag clip, I realized the problem! Our finances are not set up to be in smooth monthly cycles. Instead of going from one end of the kitchen pulling out bag clips and being done when I get to the end of the cabinets, our spending cycles never end.

We track our spending religiously, but put the spending on credit cards (that we pay off every month, obviously). Those credit card bills aren’t paid until the next month, so it’s unclear when to call the month over. One credit card posts on the 21st of the month – so anything before the 21st, we count as the current month and everything after starts going onto the next month’s budget. The other credit card posts on the 5th, so we usually do the same thing here, but that means each month has five extra spending days after the month is over. And there is this weird overlap period where one credit card is on the current month and the other one is already spending next month’s money. Then the mortgage is due at the beginning of the month, so we pay it in the calendar month before the bill (February mortgage is actually paid the last week of January). It’s all very confusing.

Here’s what our cycle currently looks like:

Financial Month

See? By the time we’ve ended one month, we’ve already started another. And our bills are due all over the month, so we just pay them right before they’re due. We’re just sticking bag clips into corners at every turn! What’s my plan? Simplify! Just as I did in my kitchen and bathroom, I plan to gather my hairbands and bag clips, remove the excess, and put the rest together in a place that makes sense. Here’s my financial plan to do this:

  1. Consolidate credit card due dates to three days after Mr. T’s first payday. Most credit cards will allow you to change this by calling in.
  2. Pay all bills due between the 5th-16th of the month at the same time as the credit card bills – three days after Mr. T’s first payday.
  3. Pay the mortgage for the following month three days after Mr. T’s second payday.
  4. Pay all bills due between the 17th of the month and the 5th day of the next month at this same time – three days after Mr. T’s second payday.
  5. The last day of the month (when I already update my net worth and my plan updates here on the blog), I will actually close out the month’s budget and any money remaining in the accounts (which should actually match the budget now!) will be put toward savings.
  6. Keep $1000 in my checking account to avoid overdrafting in case the changeover causes me to make a big mistake in paying bills or transferring to savings.

Since I just had this brilliant revelation this weekend when I first found all the hairbands (and bag clips!), I haven’t yet put the plan into action, so I’ll let you know how it goes. But finding the hairbands was the first step and I now know where they all are – safely enclosed in a specially-marked “hairband” box in my newly organized bathroom drawer. Thanks for sending me on a hunt to find them!

Love, Maggie

Found Hairbands

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15 Comments

  1. Haha, Maggie this is great! And I’m honored that you would write a response post to my hairband post. Bag clips are something I had not even thought of, but I bet there are piles of them hidden in the dark corners of my kitchen too. :/

    Ok, also: you can call the credit card company and ask them to shift your due date? No way! I had no idea. I have two credit cards that coincidentally happen to be due within a week of each other, but I was recently thinking that it would be great if my credit card bills and student loan payments were all due at the same time. Looks like I can actually make this happen! 🙂

    Good luck with your new system — you’ll definitely have to let us know how it goes!

    Love, Sarah

    • MaggieBanks

      Thanks, Sarah! I thought about you all weekend as I found so many tiny things! 🙂

  2. This is too funny! First, loved Sarah’s post on all of the hairbands (the same goes with bobby pins and how many buns I used to have to put my hair in for ballet class)! Second: my fiance doesn’t like bag clips and I always find them hidden where he took them off, and accidentally forgot to toss them! This is a fantastic revelation you had between your monthly bills and hairbands/bag clips. If only people more people could find inspiration in the little things to work on personal finance. 🙂 I think the consolidation of credit card payments is definitely great, and people do not realize that this is something you can call in & simply ask for (or, if you would just like a date to be changed)!

    • MaggieBanks

      I’m pretty excited to put my plan into action… but as it’s a holiday, I’ll get to work on it promptly tomorrow! 🙂 But actually being able to reconcile everything on a specific day at the end of the month will be awesome. Maybe everyone else in the world has already figured this out!

  3. Heather M

    My hubby and I pay bills twice a month when the pay hits. We just divide the bills based on which are due after which paycheck. All bills are paid though online banking so it is rare for us to ever write a check. This method means bill are paid early but means they all fall within the month. Credit cards are paid similarly, it is not uncommon for us to pay the balance before the amount is due for the following month. That is we pay between the billing cycle.

    • MaggieBanks

      Heather – You’re so smart to have already figured this out! I’ve been silly for so long! I hate checks since they can post whenever… Florin’s preschool only takes those and that’s annoying, but there’s just two months left of those payments!

  4. I hope this plan works for you! My system looks similar to your old plan, though we are slowing transitioning to a simplified plan. It’s amazing how much floating balances can screw with tracking!

    • MaggieBanks

      Floating balances are horrible for tracking and saving! I’ve been such a fool! 🙂

  5. I did it a little different: 3 days after I receive the money from employer I pay (automatically or not): savings (20% – first I am paying me), rent, assurance, pension plan, electricity, phone, internet. First Friday I pay the school for child ( not monthly) and get out cash for weekly groceries.
    The fun budget is paid with the card 🙂
    For buying with credit card (online shopping) I put first the money there, and then I spend the money…

    Because I know what and where is going I check by bank account only 2-3 per month and I have no more the fear “did I paid all??”

    • MaggieBanks

      I love it! A simplified monthly plan will change everything! You’re so wise to have already figured this out. 🙂

  6. I have never thought about how I pay my bills or what my cycle really looks like, but now that I think about it – I am pretty on top of it. I pay everything the day of payday (including bills, rent, etc.) which makes things pretty easy to keep track of.

    I think the adjustments you plan to make will create a world of a difference. Keep me posted on how it goes 🙂

    • MaggieBanks

      Oh I will! I’m pretty blown away that I never realized how much a rolling balance makes it so that the cycle is never done. I look forward to having days in the month where everything is DONE!

  7. Oh, I don’t even want to think about all the hairbands lurking in the dark corners! 🙂 But I totally relate to your accounting problem, and love your solution. We have the same situation (except for the different paydays), but with the added complication of lots and lots of work travel expenses on our personal credit cards (because we want the points, of course!), which adds that much more complexity. But now I’m wondering if I could at least streamline our CC due dates to help some of this… thanks for the great suggestion!

    • MaggieBanks

      Yes! I think that one simple change will make a huge difference! (Why didn’t I think of it earlier!?!) Thanks for dropping into our corner at 35,000 feet. 🙂

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