How I currently manage my finances vs how I want to manage my finances

My current system is as follows:

• Three credit cards
• Discover One
• AMEX Blue
• Chase Amazon rewards
• One debit card
• Charles Schwab Bank

Subscription bills go to my discover card. I use AMEX for groceries and my Amazon card for all other purchases. My paycheck gets directly deposited into my Charles Schwab debit card and all credit card payments are drawn from the same checking account. I set a monthly budget for myself, but I have a hard time sticking to it.

The problem isn't that I have a lack of discipline. The problem is that this system is too fucking complex.  Monthly fixed expenses like entertainment subscriptions or phone bills get deducted at different times during month and credit card balances accumulated in the current month isn't due until the following month.

I can't simply look at a single balance and say, "can I afford to buy this thing I'm about to buy right now?".

In an excellent post by Ramit Sethi on automating your finances, he says

"Most people neglect one thing when automating: dates. If you set automatic transfers at weird times, it will inevitably necessitate more work, which will make you resent and eventually ignore your personal-finance infrastructure. For example, if your credit card is due on the 1st of the month, but you don’t get paid until the 15th, how does that work? If you don’t synchronize all your bills, you’ll have to pay things at different times and that will require you to reconcile accounts. Which you won’t do."

That's exactly what I've experienced! Because my bills were not synchronized, I felt like I could no longer trust the balance that was in my account to the point of ignoring it altogether.

Ramit offers some great advice for avoiding this problem: get your bills on the same schedule. Get paid on the 1st? Get all your bills paid at around that time automatically. There's a couple of problems (which he addresses) that makes this a bit tricky. First, not everyone gets paid on the 1st (or even once a month). I currently get paid twice a month - on the 6th and on the 22nd. Second, it's a lot of work to try to get companies / services to charge you on the date of your choosing and keeping that up to date as your income schedule changes.

I really like his idea, but I think we can we set up an even simpler system. One that is less dependent on when you get paid or charged.

The system I'm about to propose is based on the following key assumptions:

1. You're less likely to overspend if you know how much you can actually spend as early as possible. How much you can actually spend = (your income - fixed expenses). You can't budget if you don't know how much you're working with.
2. Simply knowing how much you can spend is not enough if your account balances do not accurately reflect it. For example, you may know that you're left with $356 after paying your fixed expenses every month. However, your expenses don't kick in on your account until long after you've received your paycheck. Looking at your bank account, it looks like you have a lot more to spend than you really do!
3. Trying to keep track of all the charges (the synchronization challenge Ramit refers to) in your head is really hard and will cause you to hate life.
4. Asking all the services you use to charge you on the same schedule is a lot of work and requires a great deal of effort and discipline to maintain.
5. Paying your bills for all the things you're charged for all at once is significantly better than splitting your payments because you have a bi-weekly paycheck schedule. Simple is good.

Ramit's system is based on the first three assumptions. You want to know how much you got to spend early, and you do that by calling companies and getting them to charge you as close to when you receive your paycheck.

I don't think it's a good idea to request every service you use to adhere to a specific schedule for several reasons. First, this may not always be possible. The universe does not revolve around you. What if one of those charges happens to be a monthly loan repayment for your friend who needs the money on the first of the month? Second, your income schedule may change. People change jobs all the time now. What happens then? Do you call every company again? Lastly, you have to do this for every new service you pay for. Just bought an ESPN subscription? Better go and make sure that they bill you on the 1st! That's going to get annoying real fast.

Ramit suggests a different system for people who get paid twice a month: split your payments. I really don't like this idea. My biggest problem with it is that it ties when you pay to when you get paid. You have to constantly re-evaluate the math every time either one changes. New service added? Oh, well does that get paid in the first or second pay check?

My proposal

1. "Pay" all of your fixed charges on the first of the month by moving it to a separate checking account. 
2. Update your charges to go on a single credit card and schedule your payments to be at the end of the month or anytime after you've received your total income for the month. 

What's great about #2 is that you can allow services to charge you anytime of the month. No need to manage when you need to pay them since that's taken care of by your credit card. With #1, you can reap all the benefits of having your bills charged on the first without having to actually reschedule any of your charges (thanks to #2). And if you don't have enough to pay it all upfront (because you get paid twice a month), splitting your charges in half is far easier this way than modifying payment schedules so that roughly half gets taken out.