This snippet is from one of our previous episodes: Seven Steps to Make Money Simple Again.

You get paid. You’re careful. You don’t do anything extravagant.

And then you check your bank account a week later and there’s a few hundred dollars less in it than you expected…

No big purchase. No blow-out. Just gone.

If that sounds familiar, it’s not because you’re bad with money. You’re experiencing what Bryce and Ben call slippage, and it can quietly become one of the most expensive habits in a household.

It’s not the big purchases that get you

The thing about overspending is that most people are perfectly capable of catching the obvious stuff.

You know a $2,000 television is excessive. You can talk yourself out of that one.

What’s harder to catch is going out for Friday night drinks and spending $130 instead of the $80 you’d loosely intended. Or the quick trip for milk and bread that somehow comes to $30, because you were already there and might as well grab something for the movie tonight.

Over a full year, all those little amounts can add up to tens of thousands of dollars — money that could otherwise have gone towards retiring debt, building a buffer or investing for the future.

Why willpower isn’t the answer

The instinctive fix is to try harder. Be more disciplined. Think before you tap.

But that doesn’t always work, because slippage doesn’t feel like overspending while it’s happening.

Ducking into the shops for something to feed the family feels essential. Spending an extra $20 here or $30 there barely registers. It’s only when you look at it in aggregate, weeks or months later, that it starts to look like anything at all.

So the answer isn’t more vigilance. It’s a system that makes constant vigilance unnecessary.

Gather, sort, calculate

Our MoneySMARTS system takes a top-down approach based on a twelve-month view.

And you don’t need to wait until January, the start of the financial year or some perfectly neat date to begin. Any month will do.

Starting now beats starting tidy.

The first three steps set the whole thing up.

  1. Gather. Bring everything into one place: bank statements, credit card statements, payslips, and your recent tax returns. The aim is to track the money going in and the money going out. Where’s the income coming from — salary, rent, dividends? And where is it going?
  2. Sort. Take all your expense items (e.g. electricity, education, holidays, donations, loan repayments) and batch them into jars. It’s the same thing your grandparents did with actual jars on the kitchen bench, just applied to a modern banking system.
  3. Calculate. Now work out what your seven-day float actually needs to be.

The seven-day float

This is the piece that does a lot of the heavy lifting.

Your living and lifestyle jar becomes a weekly allowance or float. It’s the money you have available to get through the next seven days… and when it’s gone, it’s gone.

Bryce and Ben like to pay themselves on a Thursday, deliberately, so the float needs to carry them through the weekend. Buy the groceries that day, and you’ve covered the essentials before the discretionary temptations arrive.

What size should the float be?

It doesn’t matter. Some households might need $270 a week; others might need $1,000. There’s no judgement attached to the number. Once you’ve calculated what yours needs to be, the job is simply to stick to it.

And here’s the payoff: you stop having to micromanage every transaction. You don’t need to agonise over every $17 purchase because you’re tracking one simple question: Have I got enough to last until next Thursday?

It might feel claustrophobic at first

If you’ve spent years letting a credit card absorb the overflow, suddenly spending only what’s available in your float might not feel liberating.

It can feel restrictive.

That’s normal, but it’s temporary. That discomfort is part of changing an established behaviour, and you have to push through it until the new system becomes your new normal.

The good news is that this isn’t supposed to be a permanent exercise in restraint. The whole point is organisation, not stinginess. Your float gets replenished every week, and if you’ve deliberately allocated money to be spent, spend it.

Discipline becomes habit

Ben’s closing point is the one worth holding onto.

Discipline creates habits. And once the float, the Thursday payday and the jars simply become how your household operates, you stop fighting your money. You start controlling it.

Which is a considerably better answer to “where did it all go?” than checking your bank statement and shrugging.

Ready to stop the slippage?

MoneySMARTS has been helping households take greater control of their money since 2009 (that’s 17 years now!) — and the full seven-step system is laid out in Make Money Simple Again.

You can download the eBook completely free, or if you prefer a physical copy, simply cover the shipping and we’ll send one your way.

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