How to organize expenses with a banking app?

How to organize expenses with a banking app? Note that banking apps can be a great way to manage accounts and manage expenses 😉

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Why sort your expenses? and organize a budget?

Why sort your expenses with a banking app? In reality, sorting your expenses has several advantages:

Realize how your money is spent
Spotting unnecessary expenses
Save time with administration
Have a visual of your budget
Create standing orders to save time

How to sort expenses?

As I wrote in my article “budget organization”. I sort expenses into 4 categories.

Mandatory expenses
Secondary & luxury expenses (leisure)
Money reserve
Invest

Standing orders

I wrote a more detailed article below the importance of standing orders😉

In broad outline. I use for standing orders for the following 3 categories:

Mandatory expenses
Money reserve
Invest

▶ Note ❗ In reality, only secondary and luxury expenses (i.e. leisure) remain in my main account! In order to understand how much money I have left to spend per month.

➡️ Any monthly expenses in these categories (mandatory, reserve and investments) are automated by a standing order.

👉 Note that from an administrative point of view, standing orders save me a lot of time every month!

For example, paying my rent used to take me a lot of time. I would wait for the bill in the mail, then pay by bank app or by post.

Now I spend 0 minutes per month!

Indeed, with an individual standing order, which takes less than 5 minutes to create. I no longer have this mental load to manage.

▶ Tip ❗ In my case, since I receive my salary on the 25th, I put all my standing orders on the 26th. Therefore, 1 day after my salary, the money that remains in my account. This is my leisure money for the month 😊

Don't overuse standing orders!

⚠️ On the other hand, you have to be careful with the automation of standing orders.

Indeed, if you apply this method for secondary or luxury expenses (leisure). It is very possible that you end up spending more money on frivolous expenses ⚠️

For example, if you have a Netflix subscription that you no longer use. This standing order will be a futile expense that will decrease your savings rate! Because in reality, you have a monthly expense that you do not use!

You have to be careful ⚠ Because as these are expenses that are automated, we no longer see them in the salary account. And we tend to forget them…

Banking App Examples

As I write this and according to my knowledge. In my opinion, there are 2 banking applications that allow you to sort out your budget easily:

Zach
Yuh

➡ Indeed, Zak or Yuh are very practical and very easy to use to track and organize daily and monthly expenses.

In fact, the "Pot" function for Zak and "project" for Yuh allows you to sort expenses by creating sub-accounts very quickly and easily. Note that it is possible to create standing orders in these sub-accounts.

There are other banking apps that have similar options. But as of this writing, Zak and Yuh are my favorites.

⚠ Note that each banking application gives a different name to the creation of a sub-account. But in reality, the function is the same.

How to deal with annual invoices?

👉 As for annual bills, a sub-account is very useful!

For example, in Switzerland, the annual payment of the Serafe television tax is 300 CHF per year (at the time of writing).

If you haven't anticipated this mandatory bill, it's complicated to come up with 300 CHF all at once.

How to calculate a monthly standing order for an annual invoice?

➡ When it is an annual bill, simply divide the bill by 12 (number of months).

For example, for the television tax of 300 CHF per year. For this example, I created a standing order of 25 CHF in the sub-account every month. I wrote as the name of the sub-account “Annual TV tax”.

Therefore, every day I receive my salary, the next day there is 25 CHF which is automated to my “Annual TV Tax” account.

When the bill arrives, a year later, I have 300 CHF in my sub-account. Because I added 25 CHF for 12 months.

So I just scan the bill and pay. And move on.

With this method, no more styling hassles ” Shit, I forgot about this bill, I'm going to have to dip into my reserves or tighten my belt for the end of this month ”.

Use Sub-accounts for everything?

Some expenses are not suitable via a monthly payment by standing order. This generally concerns 2 categories:

Unforeseen events
Variable expenses

Since these are unpredictable expenses, it is impossible to plan a fixed budget in advance.

In these cases, why not put money each month into a reserve sub-account?

Indeed, it is better to have some money set aside to cover variable expenses, rather than not saving and being in difficult financial situations for your expenses.

How do you divide your sub-accounts Jo?

Note that you don't have to divide your sub-accounts as well as I do. But in my opinion, I like to divide my budget according to each bill.

Here are my standing orders 😉

Mandatory Expenditures

Rent
Taxes
Health insurance (the joy!)
Races
TV tax
Apartment related costs (e.g. electricity)

Semi-luxury spending

Phone subscription
Dentist
Insurance (other than health insurance)
Cats

Luxury Expenses (Leisure)

Vacation
Car

Saving

Reserve end of month
Reserve occasional big glitch

Invest

Account 3a global 100
Sotck exchange
Real estate

Shared Sub-Accounts

👉 Another interesting point with sub-accounts for those who have shared expenses is to create a shared sub-account.

For example, with chérie coco, my girlfriend, we divide certain bills in two.

With shared sub-accounts, we avoid painful discussions about bills!

Before, I was constantly telling him, “I miss so much for this tax, I miss so much for this insurance, give me half please”. She would immediately reply with sentences like “Wait until the end of the month I have no more money. Oh no, I had planned to go to a restaurant with friends with this money, etc.‘'‘‘'‘

In order to solve this problem, I showed the sub-accounts and standing orders.

Regarding the common invoices, she immediately started to make standing orders in the sub-accounts with my method. 😉

👉 Note that for our couple, it is very practical for 2 reasons:

Every time we receive a bill, I no longer need to ask her for money! In fact, we have a joint sub-account for a particular bill category. In reality, she adds money to it every month in an automated way. And I just have to scan and pay the bill when it arrives.

With some accounts, such as Zak Ilico for example, she can view and pay the bill herself if she wishes.

👉 This way, we avoid some discussions and some oversights. Plus, it's easier for both of us to withdraw money from a Sub-account that we've been saving for months, rather than from our leisure budget that we had planned for entertainment.

Conclusion

➡️ II propose to make a standing order for 3 categories:

Invoices
savings
Invest

As a result, you will have money left in your leisure account, which you can spend according to your monthly desires.

👉 In my opinion, the simplest, is to create sub-accounts from your banking application. By adding money to each sub-account according to your expenses every month.

Regarding annual expenses, it is enough to put 12th of the money per month.

On the other hand, regarding variable and unpredictable expenses, it is necessary to add money to your savings account. The more money you put aside, the less stressed you will be by these expenses.

As I write this article, Zak or Yuh allow you to create sub-accounts very easily and very quickly. It's very convenient.

👉 In reality, you will save a lot of time and reduce the administrative burden with this method.

In addition, regarding your leisure account, you will be less bothered by bills that you had forgotten about. Which will allow you to spend your money more freely 😉

How to organize expenses with a banking app?

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