Frugal Village Forums banner

1 - 20 of 34 Posts

·
Registered
Joined
·
573 Posts
Discussion Starter · #1 ·
For about six weeks now I have been putting myself through probably the tightest budget I have ever put myself through. Not that we really need to, but honestly I’m sick of the debt and want to be done with it as soon as possible. So recently I decided I would make sure I have no stagnant money in every paycheck and use every last bit of it and see how far I can stretch it.

Right now I have two checking accounts. They both have one penny in them. As much as I may be entitled to give my two cents, I really can’t right now because if I go down to zero balance they might mistakenly close my account. Doing this has really helped me stick to my budget and it makes me feel a little safer.

First off, I don’t carry cash and figure if I get robbed I can just call up the bank and play the recording “Your available balance is Zero Dollars and one cent.” and I think at that point I will either be left alone or shot. How can you clean someone out who doesn’t have anything?

Maybe I’ll get lucky and the thief will have some sympathy and give me their weapon so I go pawn it for some cash. Oh, how I can dream!

Also, going through online banking and seeing that there is only one cent in your account really makes it seem like you’re teetering on the edge of bankruptcy. This causes me to stretch it even further. I literally biked to the store this week and bought $5 worth of groceries… and my goal is to make this last all week. Thank goodness for the public library and tap water.

The downside, however, is that when I stopped by Fifth Third Bank this week to inquire about opening up a savings account they pulled up my one penny account and blew me off. The other downside is that I had $10 cash I took with me to get gas on my way to work the other night. As I approached the $10 mark I slowed down and then it skipped right over $10.00 and stopped at $10.01. This almost threw off my entire budget.

I feel like a kid again. Remember how any amount of money was a lot of money? I found a $5 bill on the ground last week and it made my month! So then I rode my bike to the grocery store and put it into the account and then divided it up equally through online banking. $1 went to Verizon, $1 went toward the mortgage, $1 went toward student loan, $1 into savings, and $1 toward the Mastercard.

It has prevented me from making stupid purchases… in fact I got an offer for insurance this week that said “How would you like to protect your assets for pennies on the dollar?”

Sorry…can’t afford it. I can't even afford to make a wish!

So here is the challenge:

Pending you don't have any minimum balance requirement on your checking account -- see how long you can go with the account having only a penny in it.

Whenever I have money left over once I pay all the bills it goes to the EF. And also, I do have a credit card through the same bank that I have my checking/savings through, but the first thing I pay with the paycheck is the current balance on the CC so it does not carry over at all. I call it my "delayed debit" card.
 
  • Like
Reactions: Sassyclass

·
Registered
Joined
·
1,545 Posts
What an interesting challenge...I look forward to reading your journey.
 

·
Registered
Joined
·
382 Posts
Interesting challenge. I may take to writing my don't need list on post it notes, one for each repetition, like a kid being naughty that was caught by the teacher, writing lines on the chalk board... maybe even make it: "I don't NEED ANYTHING." Okay, so that's extreme. :)
 

·
Moderator
Joined
·
19,119 Posts
Like this idea - may not be able to implement it now, but shall follow your trip and learn. Mahalo!!
 

·
Registered
Joined
·
573 Posts
Discussion Starter · #5 ·
I will post my paycheck breakdown tomorrow when I have the time.
 

·
Registered
Joined
·
217 Posts
I regularly would take mine down to the 1 or $2 mark, but I'm a little afraid to go down to 1 cent. Guess I don't trust my math that much! :shrug2:
 

·
Registered
Joined
·
573 Posts
Discussion Starter · #8 ·
Okay.

I have safeguards in place on this that I think are necessary. this is essentially a zero based budget.

First: Regular expenses are pay via AMEX right now on a one pay period delay -- the residual on this payday is factored into the next paycheck's budget.

Second: I have a reserve line of credit attached to the checking account in case I mess up. I have never used it since I started this.

Third: We are paid hourly and our income varies. I zero out the budget and the excess is put into the EF. I usually round off the numbers on the debt payments when I actually go through and pay them.

Fourth: In a cash emergency I will pull from the EF -- Or sometimes I will use EF as a payday loan. For example: My mortgage Payment is due Oct 1, however, My next payday will be Sept 22. The next paycheck comes Oct 3. So I will pull from EF to make the payment -- then the first thing on the Oct 3 budget will be the putting that money back to EF.

Lastly.. .current breakdowns:

Starting balance .01

Budget
Income $1650 (9/5/09) ($1650.01)
AM EX: 305.32 ($1344.69)
Electric Bill: 100 ($1244.69)
BoA Card: $1000 (244.69)
Time Share: $244.68 ($.01)

Actual Income: $1864.89
Amount transferred to EF: $214.89

Next Paycheck:

Income:

$1800 (Holiday Pay Included)
Citi MC: $920 ($880)
AMEX: $225.11 (654.89)
Student Loan: 85.03 (569.86)
BoA: 569.85

Ending balance. $.01
 

·
Registered
Joined
·
573 Posts
Discussion Starter · #9 ·
question----if you are only keeping .01 in your checking account...
how are you paying the bills?
Money sitting in my checking account earns no interest and doesn't do anything toward my financial goals. It just sits there. Dead money.

When the paycheck shows up all funds are dispersed within a few days, bringing the amount down to a penny again.. see my breakdown.
 

·
Registered
Joined
·
615 Posts
Um.....do you eat? I didn't see food anywhere in your budget. Or phone, internet, mortgage. Just curious. I commend you for really making every penny count.
 

·
Registered
Joined
·
573 Posts
Discussion Starter · #11 ·
I stick to a strict budget and charge all food and gas to the AMEX card -- hence why there is a payment on every paycheck. I do this in lieu of carrying cash or having to worry about guessing the wrong amount with my debit card.
 

·
Registered
Joined
·
573 Posts
Discussion Starter · #14 ·
No. My checking account has no minimum balance requirement nor does it have any fees.
 

·
Registered
Joined
·
166 Posts
Very cool Preston. I'm excited to watch your progress :)
 

·
Registered
Joined
·
3,244 Posts
Very neat idea.

I guess I do something similar, but I leave alittle more in the account. With 4 kids and 2 dogs, there are always unplanned for incidentals, field trips, etc. So I budget an amount. What ever is left over the night before payday is transferred to the FFEF account. (work in progress). I don't transfer it all over, as I get charged to with draw from the savings. That said, I get a higher interest on that account and as it is getting a higher balance, those service charges will not be applied(min balance to have no fees).

GOod luck!
 
  • Like
Reactions: qsaver704

·
Registered
Joined
·
1,494 Posts
Very neat idea.

I guess I do something similar, but I leave alittle more in the account. With 4 kids and 2 dogs, there are always unplanned for incidentals, field trips, etc. So I budget an amount. What ever is left over the night before payday is transferred to the FFEF account. (work in progress). I don't transfer it all over, as I get charged to with draw from the savings. That said, I get a higher interest on that account and as it is getting a higher balance, those service charges will not be applied(min balance to have no fees).

GOod luck!
mommy4ever, your way seems a little safer to me. I can't stand having a large amount on my credit card even if I do pay it off monthly. I give it to my DH and we try to spend less than $200 a month on it. I need to start doing something similar, though. I am saving a little. I got used to those larger checking account numbers though. I need to be willing to transfer more into savings the day before payday.
 

·
Registered
Joined
·
1,196 Posts
I find that it's best for me to keep my money in safe investments, there's always a little earned interest then. If money just sits in a chequing or even a savings account, there's very little advantage in that.
I only keep what I need for the usual expenses in my account, and every bill is pre-authorized payment, so I never bank online. I never have much cash on hand either. I pre-plan my grocery spending, etc. and then withdraw what I need as I need it, and there's never more than a few dollars in my wallet.
It also saves me money to pick up my own statement every month, because if they have to mail it out to me they charge a small fee.
Like you said, every penny helps, and fees are certainly going up; and there's a fee for everything, it seems.
 

·
Technical Support Sleuth
Joined
·
6,481 Posts
I only keep what I need for the usual expenses in my account, and every bill is pre-authorized payment, so I never bank online.
Just as a quick heads-up, there are some big risks involved in pre-authorized payments. You are basically giving access to whatever company to stick their hand in your account and fish around for your money whereas with online banking through your bank you are telling your bank, when to spend what amount of money to who. I would read all of the fine print/disclosures that come with that very carefully.

Having worked in a bank I have seen some horror stories--one gentleman authorized a company to withdraw 330$ from his checking account, they keyed in 3300$. Because he authorized the company to pull the money from his account, the company had to be the one to refund the money, refund any overdraft fees he incurred etc. THe bank wasn't at fault. He got them to refund the difference, but it took 3 weeks.

Another lady had authorized her cable company to do a one-time payment from her checking account. In all the little legal mumbo jumbo, where most people just glaze right over it and click the I agree button or say yeah okay it's fine, it said that in the event of default, they could debit her account for the full balance. And they sure did. Which wiped her account balance to zero when she had outstanding checks etc.

Just a heads up.
 
1 - 20 of 34 Posts
Top