New Financial Management System

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 a 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?  

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About Jeff

Jeff is the founder of sustainable life blog and has been interested in sustainability for most of his life. After realizing in 2007 that his finances were a total wreck, he started reading financial blogs and quickly realized that what is best for your wallet is typically better for the earth, and is usually healthier. On sustainable life blog Jeff shares his journey to a more sustainable lifestyle. For updates, subscribe by email or like us on facebook.


  1. I do this too, and put all of my spending on my rewards credit card. I’m feeling a bit like Goldilocks with my credit cards though, haven’t found the one that is “just right” yet. Miles? Cash back? I don’t know!

    • I have been feeling like that lately, but I think i’ve found the right one for me. I dont use the cashback cards because they dont really give great deals for me (I dont buy much gas, etc)

  2. You should try using all cash for a couple of months. I know the reward cards are nice, but we always spend more when we use the credit cards. Your expenditures have been high for a while now, maybe the system is not really working?
    Have you tried using all cash?

    • You know joe, I thought about this as well, and getting cash would be a pain but not unmanageable. As a workaround, what I did was set a limit for all my “non bills” expenses on my credit card, and that was all for the month. Once I get to that number, the monthly spending will have to stop. So far it’s worked, as i’m under the limit and the month ends in less than a week. Also, there’s a mistaken $150 on there that I need to get back

  3. I use a frequent flier credit card exclusively. I pay only a few things in cash. I st up a payroll deduction for my retirement savings to max out my 403B, IRA and Roth IRA.

  4. We pay for everything possible with our credit cards, including car insurance, cell phones, and electricity. We don’t have a separate card for those transactions but just our regular primary cash-back credit card. I don’t see anything wrong with it as long as you know you won’t carry a balance.

  5. I don’t send the paychecks directly to our savings but I really like that idea! I think I may try that out next month. I do always put the budgeted amount into savings but I suppose it would be more if it all went straight to savings.

    I use one rewards card and pay it off monthly. My rewards card give cash back so I redeem the points shortly before Christmas and use it towards gifts.

    • Emily,
      I’ve been sending the entire paycheck to savings (say, 5500), then depositing 3500 in my checking for the month. that way, I spend way less than I earn and always save something!

  6. I too use a rewards card for my expenses. I figure that I might as well try to get something to go along with my purchases, serving as some version of cash back in a roundabout way. Can’t get that with cash! Plus, it’s easier to track expenses and categorize this way, using a credit card.

    • Agreed. One of the best reasons for me is that I can track everything, and if some places have a limit for transaction (which they shouldnt, but that’s a rant for another day), I probably wont buy it because it’s less than 5, and if I had cash, that 5 would get spent

  7. I like the idea of direct depositing the paycheck to savings and transferring a monthly amount — never thought of that! I find that I spend more when I use credit cards, so I don’t use one at all.

    • I think that sometimes I do spend a little more, and I’ve been focusing on putting on the brakes lately, and think i’ve found the best way. the credit cards aren’t for everyone.

  8. I’m a big fan of miles. I do everything possible on my cards to maximize what I get and can stretch the most out of bonus rewards. My current cards are listed at

  9. I do this exact same plan to manage my money. Hope you keep us posted post-wedding.

  10. We do the same thing. We put everything possible on our Mastercards… and rack up the Air Miles by doing so. So long as you pay off your balance in full every single month, why not?! In the end… they are paying us to use the credit card.

  11. I have a VERY similar set up but I have found that drawing it out is much easier to understand: