Trying a new architecture for managing my basic finances

Back when I was a student with almost no money and no credit cards, managing my finances was simple. The only recurring expense I had was my tuition and room and board and my parents took care of that once a year. I didn't own any credit cards so all the money I had to use was whatever I had in my bank account from my on-campus jobs. 

As far as I was concerned, the financial architecture of my life looked like this:

Sometimes I wanted to buy stuff on Amazon.com and sometimes I would go with my friends out to the city to eat at a restaurant. I had no bills to worry about month to month. Since I didn't have credit cards (zero debt), I knew exactly how much money I had just by looking at my checking account. It was very, very low stress. 

Nowadays, things are a bit more complicated. I have lots of bills to pay, I use a number of services that charge me periodically, and I have multiple credit cards.

My financial architecture now looks like this:

My parents are no longer handling my fixed expenses and the fixed expenses that I deal with now exist on different payment cycles. As a college student, there was one giant payment in the beginning of the school year that pretty much covered my ass for the whole year (food, living, club activities). Now, there's a bunch of individual fixed expenses that charge monthly - and at different times of the month!

I can no longer just look at my checking account and know how much money I have to spend each month because:

• I pay for services using my credit card and credit card balances aren't due until the following month. So if I spend $1000 right now on a plasma television, I won't see that amount reflected on my account this month since it goes towards what's due the next month. 
• I pay for services using multiple credit cards, which means I can't know how much I have to spend until I analyze the statements of all of my credit cards!
• Some services (like my building maintenance fee) are fixed and recurring but can't be paid using a credit card! And at the same time, they bill at the middle of the month. This complicate matters even more. 

I don't like this at all. It's stressful and on more than one occasion it's caused me to overdraw my account because I don't know how much I actually have to spend. Sure, I can just start tallying how much I spend every single day but I really don't want to do daily, manual accounting.

Here's the new system I'm attempting to move towards: 

In this system, I only use a single credit card for all of my fixed, monthly payments. The benefit of using a credit card for these services is that I don't have to worry about when in the month they bill me. It could be the 2nd. Mid-month. 23rd. It doesn't matter. All I need to be concerned about is:

• When my credit card payment is due
• I have enough money to cover that payment

The credit card is essentially an interface for payment between me and all the monthly services I have to pay for! Also, you can continue building your credit and get cash back rewards for using the card.

The second key feature is switching my primary and secondary checking accounts. The secondary checking is now responsible for all outbound payments - to credit cards and fixed services that don't use credit cards like my building maintenance. The key benefit of this is that it gives me complete control over when I want to deduct the expenses from my primary account. If I want to do it at the beginning of the month, I can set up a system to move X amount of money over. 

With these two changes, I have full control over when to pay and when to get charged. Sure, they need to be synchronized but having to synchronize two dates is a vast improvement over having to synchronize N where N is the number of services AND credit cards. 

How to set up this system

• Set up a fixed payment checking and fixed payment credit card
• Create a second checking account if you don't already have one.
• Choose a single credit card to pay for fixed expenses (it doesn't have to be all of them).
• Update as many of your fixed cost, recurring services to draw from your credit card. 
• Use your second checking to pay off your credit card and remaining services not on your credit card.
• Sync schedules
• Update credit card to charge balance at the end of the month. 
• At the beginning of the month (or close to the date you're paid), move the money over to your fixed payment checking. 

Migrating

If you're migrating from a different system, it's easiest to pay off your total balance for all of your credit cards before adopting this new system. Once everything is set up and your cards are paid off for the current month, set up the scheduling for the next month!