Den of the Cyphered Wolf

Saturday, June 14, 2014

If I Were A Rich Man: Playing With Money



So despite all my moaning about being broke what "bugs" me the most about it is being broke is inefficient and inefficiency bugs me on a fundamental level. See since I don't have a lot of money I often have to cut corners to prevent not being able to pay things at all and this creates a scenario where it's hard for me to know how much I money actually spend, owe, need and have.

For instance I would like to make regular amount payments on my credit card  over the minimum and when I have the money I do. But when things get tight how much I actually pay is based on weird mental calculations and guesses.  Making it hard to budget out other expenses.

So I spend a lot of time thinking to myself. You know if I had an extra grand or two the first thing I would do is set things up the way I want.

So let's go.

Business Accounts
The biggest thing keeping this from being an actual business is that I don't have enough money to truly segregate the expenses. If there is some event coming up that I think would make an interesting post, or FOIA fees I either use my credit card or shill to my parents.

In a perfect world I would have a bank account as a sole proprietor, would pay myself a salary from it as well as use it for expenses for the blog.  Travel and event expenses, FOIA and document fees,  equipment and software, web hosting,  maybe even paying freelancers.

And it would give me a way to use Kickstarter.

That said the main reason why I would want to set up "my system" is that it allows "money to flow" as it must.


And for hard budgetary limits to be set based on income to the accounts that can be verified by a bank. So if I ever did have a successful profitable business I would be able to make a responsible call as to how much money should go to me (regular salary) and how much should stay with the business, and how much should go to Uncle Sam..

As it is right now Google owes me 10 bucks and let's just say I owe my mom for some FOIAs.

Tax Accounts
If I ever did start making money at this taxes would get a little complicated. Since I owe almost everybody at least with this blog I don't worry about taxes so much. Heck even with my regular gigs most of it comes back in a refund.

That said I would want to have an account to regularly put payments into so at the end of the quarter I'm cool. Since freelancers and sole proprietors have to pay quarterly taxes I'm not so much worried about letting it sit in a bank account as much as missing a deadline. And that's what most of these accounts are about actually having a place to put money with the expressed purpose of paying certain types of expenses by a deadline and taxes are one of those.

The Personal Income Checking Account or Da Pot
Like I said earlier I want to be able to set hard budgetary limits based on my income and this is tool to do it. All this account would do is be a place to bring in direct deposits, paypal transfers, and cash over let's say 50 bucks.

Oh and for the record I'm making up names out of my head so if there is some thing that's called that I'm sorry.

Since the account would only pay out to other accounts it would help me conceptualize where I get money and how I spend money.  And sending automatic payments to other accounts would help keep me from just "spending the money" without concern of other priorities.

Every three months I would check in and move any surplus over a certain amount into other long term accounts that I will get to in a bit.

Necessary Expenditure Checking Account
At the end of each month this would pull money from the pot and then via automatic payment systems pay bill collectors. There would be two accounts like this but this one is for stuff I have to pay or bad times. Rent, utilities, insurance stuff like that.  It would also be used to pay for groceries and transportation though those aren't regular reoccurring expenses

The account mostly serves as a way of committing the money. Once it's in the account it's not going to spent for anything else until or unless I do a quarterly check in and find I have a ridiculous surplus, at which that money will be transferred somewhere else.

Recurring Luxury Checking Account
Same basic thing as the necessary expenditure account except with stuff that let's be honest I could do without. Still I wouldn't like to continuously cancel and uncancel services because I spent the money first on something stupid. Like a $70 bomber hat.

Rainy Day Savings Account
It is what it sounds like, every month I would send a percentage of my monthly income from my income account to a savings account with a few stipulations. I don't want the account to get too big. Savings accounts tend to have a very low return on investment.  So every ahh let's just go with quarter, I would check to see if if it reached pass a cap. If it did I would send the surplus money to.

Investment Capital Checking Account
This is just a pool of money I would have to invest at any given time. I might invest it in some type of retirement fund, or the stock market, or real estate or put it back into a business account. But it's all money I would expect some type of later return on.

I might also move from the Rainy Day Account to the

Upgrades, Maintenance and Repairs Saving (Or Checking I Haven't Made Up My Mind) Account
Stuff breaks. And when getting new I always want to get something that will be an improvement on my last experience. I don't like moving sideways on computers, electronics, furnaces, roofs, cars, apartments and other major expenses. You know that stuff won't last forever and might as well be prepared for the inevitable than scrambling from a "surprise".

At the beginning of each year I would take an inventory. List how long I've had major stuff and figure out what type of repairs and replacements are needed or will be needed and try to budget it out.  Computers last 4 years Tv's last about the same. Cars go bust after about 10 and furnaces at about the same. Roof's about 5. And you want to hire an electrician regularly just to make sure everything is on the up and up.

And since I view the human body as a piece of hardware healthcare stuff will get thrown in there to. Eh doctor's visits and surgery fit the repair and maintain paradigm.

Liquid Money Checking Account
So after all that stuff is committed this is an account that represents money I have free to spend. I want slice. Catch a flick. This is what I have to work with. Again I would probably check in quarterly to make sure it's not getting too big.

The Reserve Checking Account
So to keep the income account the income account this would probably a good place to put surplus money that went through the system and then hit the cap somewhere. It's not exactly free in the same way the liquid account is but it's money I should probably do something with. So it would probably go into one of the savings accounts or the Capital account.

The Issue of Fees
I really want to make this system work and if I ever did have money setting this up would be the first thing I did. But I'm also concerned about bank fees. Right now my checking account has no minimum balance and no monthly fee but I know that might not be the case if I opened up new accounts. You'd think they would allow envelope accounting. That's an issue deserving research but right now this is all hypothetical in my head. So screw it.

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