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.

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:

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