Household budget management becomes 90% easier with a 'system' rather than 'motivation'

This time, we will cover the content of the third installment, 'Saving is a system',

and how to translate that concept into actual automation methods.

You decide, 'I'll try hard to save money this month,' pile up receipts in your wallet, and end up reaching the end of the month without recording anything. You look at your bankbook and panic, 'Wait, did I spend this much?' Have you ever had that experience?

Actually, the reason household budget management doesn't go well is not because you 'lack motivation.' The real cause is that the system is set up to require motivation every time.Conversely, once you set up the system, you can create a state where money remains naturally without you having to be conscious of it.

According to a survey conducted by Money Forward in 2024, 42% of household account book app users have been able to continue for '3 months or more.' In other words, more than half have given up along the way. On the other hand, the common trait among those who have been able to continue was not the 'frequency of recording' but 'the degree of automation.'

In this article, I will introduce 8 'truly effective automation' techniques that are not touched upon in existing savings articles. These are not 'standard' methods like advance savings or reviewing fixed costs, but more concrete techniques that you can set up starting today.

Chapter 1: A system to visualize the 'flow' of money

1. The story of how assigning '3 roles' to bank accounts makes the flow of money visible in an instant

The most effective yet surprisingly unknown part of automating household budget management is 'assigning roles to accounts.' Many people pay for living expenses from the account where their salary is deposited and try to manage savings in the same account. But with this, it always remains ambiguous how much you can spend now and how much you have saved.

Therefore, I would like to propose a method of dividing bank accounts into the following three roles.

• Deposit-only account (salary transfer destination): An account just for receiving salary and bonuses. You never spend from here.

• Living expenses-only account: All daily expenditures such as rent, utility bills, food expenses, and daily necessities are paid from here.

• Savings-only account: Never withdraw from this. It's fine to even forget it exists.

Once you have these three ready, set up two automatic transfers for the day after payday.
One is to move the advance savings amount from the 'Deposit-only account' to the 'Savings-only account.'
The other is to move this month's living expense budget from the 'Deposit-only account' to the 'Living expenses-only account.'
With this, the deposit-only account will always be almost empty.

What is good about this system is that just by looking at the balance of the living expenses account, you can see at a glance how much more you can spend this month. No complicated calculations or inputting into a household account book app is required. If you open your bankbook, the reality is right there in numbers.

Since I switched to this method, the regret of 'I spent too much...' at the end of the month has completely disappeared. If I put 200,000 yen into the living expenses account, if 50,000 yen remains at the end of the month, I can instantly judge that 'this month was easy,' or conversely, if the balance is 30,000 yen, 'I'll cut back a little next month.'

The point to note is to set the amount transferred to the living expenses account on the higher side at first. If you set it to the bare minimum, you will end up in the red due to unexpected expenses and end up having to withdraw from your savings account. For the first 3 months, observe while finding the budget amount that suits you.

2. The ultimate lazy technique of only 'linking' your household account book app and never recording anything

The biggest reason household account books don't last is that the tasks of 'taking photos of receipts' and 'manually recording entries' are tedious. But in reality, the true value of household account apps lies not in their 'recording function' but in their 'automatic synchronization function'.

Major apps like Money Forward ME, Zaim, and Moneytree can automatically sync with bank accounts, credit cards, and electronic money. Once you set up the synchronization, you don't have to do anything else; expenses paid by card or withdrawals from your account are recorded automatically.

What is important here is to minimize cash payments as much as possible. Pay for supermarket shopping, convenience stores, and vending machines with a card or electronic money whenever possible. If you do this, almost 100% of your expenses will be recorded automatically, and all you have to do is 'open the app once a week and take a look'.

In fact, I haven't taken a single photo of a receipt in over two years, but the accuracy of my expense tracking has actually improved. Since I only pay about 1,000 yen in cash per month, the app's records and my actual expenses almost always match.

Furthermore, another benefit of automatic synchronization is that you can immediately notice unauthorized credit card usage. If you have a habit of opening the app every week, you can quickly spot anomalies like 'Wait, I don't remember this payment.' In fact, an acquaintance of mine used this method to discover unauthorized charges on an online shopping site just one day later and immediately contacted the card company to prevent further damage.

However, setting up the app's synchronization takes about 30 minutes at the start. But this is a one-time task. If you consider that this 30-minute investment will make the next several years dramatically easier, the return is more than enough.

Chapter 2: Automating 'Notifications' to Prevent Wasteful Spending

3. A hack to manage subscriptions with a 'reminder' and 'dedicated memo' double-management system

A common failure in subscription management is that 'even if you make a list, you never look at it.' Even if you go to the trouble of writing it down in a memo, it's meaningless if you don't open the memo itself.

Therefore, I would like to propose 'double management' for subscriptions. Specifically, set up the following two things at the same time.

• Create a list in a dedicated memo(smartphone memo app, Notion, etc.)

  • Include service name, monthly fee, renewal date, and last usage date

• Set a reminder in your smartphone calendar for one week before the renewal date

  • Example: If Netflix renews on the 15th of every month, set a reminder on the 8th saying 'Netflix continuation check'

The beauty of this double management is that you don't have to go out of your way to check the memo; the notifications tell you automatically. When the calendar notification arrives, ask yourself on the spot, 'Will I use this again this month?' If yes, keep it; if no, cancel it right then and there. This system that forces you to make a decision every month prevents wasteful subscriptions.

Furthermore, for annual subscriptions (like Amazon Prime or Adobe CC), I recommend setting two reminders: two weeks before and three days before renewal. Use the two-week reminder to consider 'Is this really necessary?' and the three-day reminder for a final check. This will prevent accidental automatic renewals.

Using this method, I noticed and canceled an annual cloud storage subscription (6,000 yen/year) and a magazine subscription I rarely read (4,800 yen/year) before they renewed. That's a total savings of 10,800 yen per year.

Also, there are recently apps dedicated to subscription management like 'Truebill' and 'Bobby.' These automatically detect subscriptions from linked credit cards and list them. However, since many are made overseas and do not support all Japanese services, using them in combination with calendar reminders is best.

4. Settings to ensure you never miss a fixed cost renewal with 'Google Calendar integration'

Everyone knows that reviewing fixed costs is important, but the problem is that they haven't decided 'when to review them.' While you're thinking 'I'll do it eventually,' your insurance and phone plans will automatically renew.

Therefore, you should set the renewal month of your fixed costs as a 'recurring event' in Google Calendar. However, the key is not to set the notification for the renewal date itself, but for the following two timings.

• 1 month before renewal: "Start considering insurance review"

• 1 week before renewal: "Final check for insurance review/deadline for switching procedures"

With a notification one month in advance, you secure time to get quotes from other companies or consider plan changes. Then, with a notification one week in advance, you give those who have "ended up doing nothing!" a final chance.

What is even more important is to set this schedule as a "timed appointment" rather than an "all-day event". For example, set it for a time when you can actually take action, such as "every Saturday at 10 AM." If it is an all-day event, you tend to procrastinate even after seeing the notification, thinking "I'll do it later," but with a timed appointment, the mindset of "I have to do it now" kicks in.

Using this method, I received a notification one month before my life insurance renewal, and after comparing quotes from three companies, I switched to a plan that was 2,500 yen cheaper per month for the same coverage. That is a reduction of 30,000 yen per year. If I hadn't put it in my calendar, I definitely would have automatically renewed it.

Also, you can manage other periodic expenses besides fixed costs in the same way, such as 2-year smartphone contracts, rental renewals, vehicle inspections, and NHK subscription fee payments. Once you set it up, all you have to do is wait for the notification. This is also a form of "automation".

Chapter 3: Tips for "Payment and Management" without hesitation

5. The reason why the anxiety at the end of the month disappeared after dividing the budget into "weekly units"

Many people set budgets on a monthly basis, such as "the food budget for this month is 40,000 yen." But with this, you might not notice if you spend too much in the first half of the month, and you end up panicking at the end of the month, thinking "I only have 5,000 yen left for the next 3 days..."

That is why it is effective to divide the budget into weekly units. For example, if your monthly food budget is 40,000 yen, that is 10,000 yen per week. Focus only on sticking to this "10,000 yen per week."

The specific way to do this is simple: reset your food wallet or electronic money every Sunday night. For example, if you use PayPay exclusively for food expenses, check the balance every Sunday and charge 10,000 yen for the following week. If you had 2,000 yen left over from last week, you can use 12,000 yen this week, and so on.

The biggest advantage of this method is that the cycle for course correction is fast. On a monthly basis, it is too late by the time you notice, but on a weekly basis, you can adjust immediately, thinking "I spent too much this week, so I'll cook at home one more time next week."

Furthermore, with a weekly budget, calculating "how much for how many days left" becomes easy, reducing daily stress. You can instantly judge, "Today is Wednesday, so I have 5,000 yen for the next 4 days. That's a pace of 1,250 yen per day."

Since I switched to this method, the anxiety of "Oh no, I have no money" at the end of the month has completely disappeared. It has actually become fun, like playing a game every week to clear the small challenge of "keeping it under 10,000 yen this week."

6. Visual management technique of using multiple credit cards by "color" and "purpose"

Many people have multiple credit cards, but most people just use them "vaguely" without any clear rules. As a result, they cannot grasp how much they have spent with which card, and household management becomes ambiguous.

What I would like to propose here is a method of completely separating cards by "color" and "purpose". Specifically, set them up as follows.

• Blue-toned cards: For daily necessities only (food, daily goods, transportation, utilities)

• Red-toned cards: For discretionary spending only (eating out, hobbies, fashion, entertainment)

• Green cards: For special expenses only (large, fluctuating monthly costs like travel, appliances, medical expenses, etc.)

When putting cards in your wallet, arrange them in this order. When shopping, you can instantly judge and use them by thinking, 'This is for living expenses, so blue,' or 'This is for fun, so red.'

The effect of this method is that you can visually be aware of the nature of your spending. If you find yourself using the red card often, you will naturally put on the brakes, thinking, 'I'm spending too much on fun this month.' Conversely, in weeks where you only use the blue card, you can decide, 'Maybe it's okay to eat out for once.'

Furthermore, setting spending limits for each card by purpose is also effective. For example, if you set the limit for the red card (discretionary spending) to 30,000 yen per month, you physically cannot spend more than that. Many card companies allow you to easily change limits via their app or website.

In my case, I use blue (Rakuten Card), red (Epos Card), and green (Recruit Card) separately, and by just looking at the 'spending graph by card' in my household account app, the balance for this month is clear at a glance. Recording is automatic, and judgment is visual. This is the ideal household budget management.

Chapter 4: Habits for 'Savings and Review' to Ensure You Keep Money

7. The Magical Effect of Setting Up 'Automatic Fixed Deposit Savings' the Day After Payday

The topic of paying yourself first is a classic, but what is surprisingly little known is the difference between 'automatic transfers between savings accounts' and 'automatic fixed deposit savings'.

Many people just set up automatic transfers from the savings account where their salary is deposited to another savings account, leaving the money in the destination account easily accessible. With this, you end up thinking, 'Just a little bit...' and dipping into it, so you never actually save anything.

That is why setting up automatic savings into a fixed deposit is effective. Unlike a regular savings account, you cannot withdraw from a fixed deposit until maturity in principle (strictly speaking, you can withdraw if you cancel, but it is a hassle). This 'cannot withdraw immediately' psychological and physical hurdle becomes a powerful wall that protects your savings.

Many online banks (Rakuten Bank, SBI Sumishin Net Bank, au Jibun Bank, etc.) allow you to set up 'automatic savings of X yen on the Xth of every month into a fixed deposit.' If you set it for the day after payday, the money moves to the fixed deposit automatically before you can spend it, and you can treat it as money that doesn't exist.

Furthermore, fixed deposits often have higher interest rates than regular savings accounts (though only slightly), so you can achieve 'saving' and 'growing' at the same time. For example, Rakuten Bank's fixed deposit interest rate is 0.02% (as of 2024), which is equivalent to the 0.02% of a regular savings account, but if you utilize some campaign interest rates, it can sometimes exceed 0.1%.

I have an automatic savings of 30,000 yen per month into a fixed deposit, and when I realized it a year later, I had saved 360,000 yen. If I had left it in a regular savings account, I definitely would have reduced it by thinking, 'I'll just use a little.'

The point to note is not to make the fixed deposit term too long. If you make it a short-term fixed deposit of within one year, you can cancel and withdraw it if you really need it. The ideal is just a 'wall that is not easy to dip into.'

8. The Habit of Doing a 15-Minute 'Money Meeting' at the Beginning of the Month Over Coffee

The last thing I will introduce is not a system but a 'habit.' It is to hold a 'money meeting' by yourself for just 15 minutes at the beginning of the month to check the current state of your household finances.

Many people try to check their household finances 'when they feel like it' or 'all at once at the end of the month,' but that doesn't last. What is important is to completely fix the date and time, such as '10:00 AM on the 1st of every month (or the day after payday).'

There are only three simple things to do in a money meeting.

1. Review last month's spending in 5 minutes (look at the app or passbook and check only major expenses)

2. Check special plans for this month (friends' weddings, appliance replacements, travel, etc.)

3. Reconfirm this month's savings goal(Check if the automatic transfer was executed)

Do this while relaxing with a cup of coffee. The key is to make it a positive time to "manage this month well" rather than a review session.make it a positive time to "manage this month well"is the point.

I have been keeping this habit for two years, and just having those 15 minutes at the beginning of the month changes my "money consciousness" for the entire month in a surprising way. Because I can plan in advance, such as "it will cost 80,000 yen for the car inspection this month, so I will limit eating out to twice," I no longer feel panicked at the end of the month.

Furthermore, I recommend making these 15 minutes a "special time spent at a cafe." If you do it at home, you tend to get distracted by other things, but at a cafe, you can focus for 15 minutes. Consider the 300 yen cafe fee as a necessary expense for household budget management.

In conclusion

The goal of household budget management is not to "do it perfectly," but"to live your own life without being swayed by money" is the true goal. None of the eight automations introduced today require special skills. Anyone can start today with a smartphone, a bank account, and 15 minutes at the beginning of the month.

How many credit cards are in your wallet right now that you aren't using? If that number exceeds three, it might be the "time to systematize your household budget." Please try at least one of the eight automations introduced today using 15 minutes at the beginning of the month.

Six months from now, your bank balance should have changed.

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