For the past year or so, I’ve been using a financial management strategy that is different that what I’ve been doing at any point previously, and it’s also different than anything that H does with her finances as well. Personally, I have had a pretty high amount of success with this strategy, and I’d like to outline it here. It’s something that I’ve been talking about with H and it is pretty close to the bones of what H and I are going to do after we get married this summer. This system maximizes benefits in our favorite category, travel rewards. H and I both love to travel, so we figure that the cheaper that we can make travel by simply doing things that we would do anyway, we may as well do that, right? So, here it is, and it’s not full on travel hacking, but it’s quite a bit of points earning, up to the amount that we are both comfortable with.
Savings Account – This is where my paychecks go. I’ve got an easy access savings account, so every month, I transfer a set amount from my savings to my checking. I dont transfer the full amount of my paycheck, so my savings has slowly built over time.
Checking account – This is where the nerves of my accounting system is. I pay all of my monthly bills out of here such as my truck payment, my car insurance, rent, utilities and cell phone. These are all on automatic bank draft (mainly so that I dont forget to pay them). I put just above my monthly nut in here, and do not use my checking account for any other transactions (except for my quarterly haircut, which I take out cash for). So, every month, a set amount gets put into this account and I just let this ride.
Miles Credit Card – This is what I use for my day to day spending that does not make up the monthly nut. Groceries, gas, dog food, meals out and every other regular transaction. Each dollar I spend earns points, and I occasionally get bonuses. Of course, this has earned me quite a bit of miles, but unfortunately I can earn more, so I’ll go over how I can do that in a minute.
When H and I get married this summer, I’d like to keep this system but modify it slightly. I’d like to move as many things as possible out of my monthly nut from the checking account to another points credit card that will be only used for those monthly nut purchases. This would include things that are currently coming out of the checking but can be paid on a credit card, like car insurance and our cell phone and internet bills. There’s no sense in not earning points off of these transactions. Much like the checking account, these monthly bills will be the only things that get put on this card, so amounts should not vary more than a dollar or two month-over-month, but will add quite a bit to our points stash.
We would continue to put all of our daily spending (such as gas and groceries) on a different miles credit card. This is one of the ways that we plan on maximizing our travel benefits with spending we already do.
Readers: Do you do something like this with your finances, or do you not use credit cards at all?