When to Move Money to Savings

How do you know when to move money to savings?

How do you know what balances to keep in you’re checking account?

When I first started out budgeting and working on my own personal finance journey, I googled these questions as well. I was looking for a simple, google auto-filled answer. The problem is that the answer is different for everyone because everyone has different timelines when it comes to payday and expenses. Here I’ve created a chart that explains how I move money around throughout the month. You’ll see it’s dependent on two things:

1. When you get paid

2. Budget – therefore how much you can float and when you pay large expenses.

First, you’ll notice I get paid only once a month (yes, it was very hard to get used to), and at the very beginning of the month. This is convenient for my budget because I have it set up so I start at “full” and work through my monthly expenses before moving money to my savings account (emergency fund) or funding other accounts.

If you get paid bi-weekly, or on some other schedule, your schedule will likely still be similar to mine, but you may mentally (or physically!) allocate different parts of your paychecks to different monthly expenses.

Here’s my money movement schedule:

2nd Business day – My paycheck clears. As a consultant I get paid once a month, so this is a very exciting day.

5th – Credit card bill due. I usually pay my credit card a few times a month so there’s rarely a big charge on this day. I had to call my credit card company to have them change my due date to the 5th. Since I get paid on the second buisness day, I know I always have money in my checking account by the 5th.

7th – Retirement account contributions are available to view. No money movement happens this day, I just like to check. I have my retirement accounts auto-balanced but I still check on them every month, it’s exciting to see it add up (I know, I’m weird).

15th – Mid-month check in. I check my YNAB budget and analyze how the month is going. I make adjustments to my categories or make spending adjustments for the rest of the month.

28th – I pay rent a few days early (it pays to be a good tenant!)

30th/31st – On the last day of the month I move the excess over my buffer amount to my HYS. I make sure to keep a a float amount in my checking account so that I’m not overdrawn in the few days before payday.

A few other things I want to point out…

1. I have my credit card due a few days after my paycheck

There are a few reasons for this:

• If I have a large expense on my credit card, I get paid a few days before it is due so I have no excuse not to pay it

• I give myself a few days between paying rent (biggest monthly expense), getting paid and paying my credit card so if I needed to move money around I could.

You are usually able to choose the day you want your credit card to be due (it goes in affect the month or two after you change it, so you can’t put it off forever). You should think about when a smart due date would be, based off your monthly money calendar, and contact your bank to change it.

2. I have a deep budget check-in half-way through the month

I look at every transaction on my credit card and reflect on how I’m adhering to my budget. It gives me the chance to make adjustments and keep myself accountable.  I’m paid once a month so it’s too easy to “set it and forget it”

3. I pay rent a few days early

Paying rent a few days early can really make you a standout tenant. It can be the difference between raised rent between leases.

I’m interested to hear your monthly-money-movement-management techniques! If you would like help creating your own monthly chart for FREE – contact me!