How To Manage Your Money Like Tony Stark

Quick note: I’m running my first-ever content for fun, so be sure to read this article all the way to the end to take part 🙂

Man, it rocks to be Tony Stark.

He’s an Avenger, he’s got a sweet pad (When I saw it, I was like, “Which Interior Designer does he use?”), and most of all, he’s got Jarvis.

Who?

According to Marvel Movies Wiki, J.A.R.V.I.S – or Just A Very Intelligent System, is Tony Stark’s artificially intelligent computer. Tony makes it do all sorts of cool things for him, like clean his workstation, help him in his research, or operate an army of self-run Iron Man suits.

I’ve always wanted a robot digital assistant to do stuff for me. Siri’s not bad, though she can’t understand me most of the time.

For example, wouldn’t it be cool if you had a system that could automatically tell you how much you have to spend on travel? Or better yet, a system that could help you save money without you having to do a thing?

Oh wait, you can. Read on.

 

The Problem With Budgeting

Last week, I wrote about how segregating your money into different categories can help you to stop agonising about whether something is “too expensive” or “worth it”. I call it the Money Jar System, and dozens of you emailed me to tell me about your own Money Jars.

Some of you told me cool stories about how you’re using Money Jars to:

• Lower miscellaneous expenses by 20%
• Save up money to become a yoga teacher
• Pay off $80K in debt

Awesome stuff!

Money Jars are fantastic, but they have one big drawback: They’re a pain to track.

When I first started on my own Money Jar System, I tracked everything using an Excel spreadsheet. When my salary came in, I’d painstakingly divide it across various Money Jars and spent time adding and subtracting it based on my expenses. I maintained 3 bank accounts. It was paaaaaainnnful.

And based on your email responses, a lot of you feel the same way about budgeting too.

Setting up your Money Jars is easy. It’s the day-to-day maintenance that’s a pain in the ass: Transferring money into it, transferring money out to cover your expenses, and tracking the balance over time.

When a habit becomes too inconvenient, we tend to stop doing it:

• When the gym is too far away from home, we tend to stop working out
• When cookies are hidden in a high cupboard, we tend stop eating them
• When Friendster got too slow (remember that?), we switched to Facebook

So how do we make our Money Jar System as easy as possible? How do we make Jarvis/Siri/(insert British-sounding name of artificial intelligence system here) do our dirty work for us?

The answer: Savings sub-accounts

 

Say Whuuuuuut?

Savings sub-accounts, yo. They’re genius inventions that let you segregate your money into different virtual “Money Jars” – all without having to open multiple bank accounts.

Here’s how it works: You still deposit your money into one bank account, but you can virtually segregate your moolah into different sub-accounts. And you can name your sub-accounts anything you like: “Dream house”, “Insurance”, “Buy Arsenal Football Club”, etc.

When you put money into these sub-accounts, you can’t withdraw it from an ATM. Instead, you’ll have to log into internet banking, transfer the money out from your sub-accounts, and then you can withdraw it.

This hassle is intentional: If you’ve read my free ebook on saving (whaddaya mean you haven’t downloaded it yet?!), you’ll recognise this as part of my “Separate” principle that smart people use to save more every month.

Currently, two banks in Singapore let you set up savings sub-accounts:

• OCBC’s Money In$ights (which they apply to all their savings accounts)
• Maybank’s iSAVvy sub-account

Here’s why I like ‘em:

 

No Manual Tracking

Let’s say that you budgeted $500 a month for entertainment, and you realise that you only spent $450 this month. You wanna “roll over” that $50 surplus to next month? No need to carefully record it in your complicated Excel file. Your sub-accounts automatically do it for you.

Or if you’re trying to figure out if you can afford that expensive gift for mum, just launch your banking app (I use OCBC’s) and Boom! you’ll know how much you have in your Gifts Money Jar, so you can go ahead and make that purchase, guilt-free.

Or if you’re saving up for a maaaaajor purchase like a house or car, you’ll know exactly how many more months you’ll need to reach your goal, so you can tweak your savings rate accordingly.

It’s like having a robot slave that does all your accounting for you. It’s great. Jarvis is already taken, so let’s call him M.A.R.C.U.S, for My Automatic Revenue CalcUlation System. (I was never great at acronyms).

It’s almost as good as saying, “Marcus, how much do I have left in my Movies Money Jar?”

And it’ll be like “You have $29,213. I’d recommend treating yourself. May I suggest the exorbitantly-priced Platinum Suite ticket?”

(Awesome idea for an app. Anyone wanna help me launch this?)

 

Automatic Savings

Next reason why I love savings sub-accounts: Automation.

Last week, I asked you to set a budget for each Money Jar that you came up with. (Didja do it? If not, now’s a great time). This is where it comes in.

Let’s say that you plan on saving $300 a month for travel. You set this up in internet banking once, and then you’ll never have to worry about it again. Every month, on a pre-determined date, Marcus will pull out $300 from your main account and stuff it into your Travel sub-savings account.

So when it’s time to buy an air ticket, all that money is sitting in your Travel Money Jar, waiting for you. All you have to do is just transfer it back into your main account and SPEND IT (muhahaha).

You can apply this to all your Money Jars – housing, travel, insurance, networking, etc.

In this instance, Marcus acts like a central postman, taking your salary and faithfully shovelling it to your different Money Jars. Good job, Marcus!

 

It’s About Making Things Simple

At the end of the day, it’s about simplicity. Personal finance doesn’t have to be complicated and a hassle. Instead, it’s about using technology to create a low-maintenance system that works.

Why? So that you can concentrate on the more important things in life, like kicking ass at your job, spending time with your family, watching Silicon Valley, or creating the next M.A.R.C.U.S.

Aight, so you’ve set up your automated sub-accounts and your Money Jar System is up and running. Now, how do you figure out how much to withdraw?

That’s where tracking your spending comes in, and I’ll talk about it in next week’s post. Till then!

P.S.: I’m issuing a challenge: Come up with an even cooler acronym (other than M.A.R.C.U.S) for a system that tracks and allocates your money for you. Send me an email with your suggestion before 10 October. I’ll pick the coolest name and reward the contributor with a $10 Starbucks gift card.

Image credit: geek melange, miguelavg, bradipo, Sherif Salama, Ape Lad