Master your Budget with ease by implementing multiple bank accounts.  These are the 7 accounts I find most helpful!

If you are ready to have your mind blown, read on!  This tip has drastically changed how we budget and has ultimately led to the success of our budgeting and going after our financial goals.

When you open an account at a bank you automatically think of checking and savings.  That is pretty standard for most people. When I first started budgeting and tracking our account, I operated strictly out of our checking account.  I had no idea you could have multiple bank accounts, let alone that they would completely change our budgeting for the better!

I realized very quickly with budgeting, I didn’t know where to put our savings for certain categories that had quarterly or annual bills.  I wanted to save the money to be prepared for the bills, but had no idea where to put it!

For example, I was setting aside $200/month for gifts and $30/month for our quarterly water bill.  If I bought someone a gift for $29.37 the next month, it was a total pain to keep track of how much I actually had left in my “gifts” category because it was all just hanging out in my regular checking account.  I knew by the time we reached December, it would be too challenging to know how much we had left for Christmas gifts.

The solution to this problem was actually pretty intuitive.  I talked to our credit union and found out I could have multiple accounts within our main bank account…..FOR FREE.  This is what led to the creation of some basic bank accounts/categories to help keep our finances organized.

This is so easy to manage and I can access the accounts online and via an app on my phone.  When I do my budget at the end of the month, I can transfer money to the account it needs to go to.  Bye bye confusion!

The 7 bank accounts you should have (counting your main checking account):

Emergency

This one is HUGE!  You have to have an emergency account separate from your checking account.  I find I have enough self-control to not touch the money earmarked for emergencies with no issue.  If you think you won’t be able to leave it alone, you should set up a separate account at another bank.

We always keep $1,000 in our emergency fund.  If we have an actual emergency, we replace the money ASAP.

Pro tip:  If you are living a month behind (my best recommendation if you have irregular income), I put my paycheck in this account (example.  I got paid May 31, but won’t use the money until July 1), and then transfer it to my main checking account when I am ready to use it for my month of living expenses.  It’s easy to operate out of the emergency fund because you always know to transfer everything except for $1,000.

Christmas (Gifts)

For our household, all gifts (birthday, graduation, boss’s day, Christmas) come from this account.  This includes wrapping paper, Christmas cards, stamps for cards as well as the actual gifts. I currently put $100/month in this category.  This money is available for all gifts throughout the year.

When December comes, whatever is left is our Christmas budget.  $100/month has been plenty for us. I think if we are spending more than $1,200/year on gifts, we may be going a bit overboard on birthdays and Christmas.

Pro tip:  To avoid running into last minute gift decisions that end up costing you more, keep some cash (in the form of $20’s) at home.  At the beginning of every year, I go through our family calendar and see who has birthdays (nieces and nephews, friends, etc.) that we would normally mail a card and cash to, and I withdraw that much in the first month to have it ready for the next year.  Then I usually hit the $1 bins at Target for their cute birthday cards.  Boom!  Done for the year!  No excuse to not mail the card out on time (yes, I still struggle with this).

Use the FREE Bank Accounts Worksheet to decide what accounts will be best for you!  Gain access below!

Loan Savings

This account is where I throw any extra money we can put toward debt at the end of the month.  We have automatic payments on our loan so I stash the money here until the end of the month when I know how much extra I have.  Then I make an additional payment targeted at a specific loan.

If you are not in debt, you probably don’t need this account, or you could name it “house” if you are trying to save up and throw some extra payments at your home to accelerate payoff.

Medical

The medical account is used to pay all medical bills throughout the year.  This is also the account we use when we are building up our baby fund (living expenses while on maternity leave, additional needs for new babies, max. out-of-pocket cost for birth/delivery).

Medical expenses are always coming up so it is super nice to have money in that account specifically for those things.  If we put $50 in the account every month, the co-pays and office visits aren’t such a big deal because we have the money to cover them.

Home Savings

Any expenses you have for your home that are quarterly – ie. sewer, trash, taxes, etc., can be saved for in this account.  We also use this account to save money for

• home projects,
• furniture replacement,
• maintenance and upkeep of household machinery (HVAC, water softener, etc.).

When we moved into our new home last year, we were able to have our HVAC, water treatment system and thermostat evaluated to let us know what the recommended maintenance schedule is for them.  We didn’t have to worry about the extra expense of having a certified professional coming out to evaluate our systems because the money was already saved for.

Car Savings

In a perfect world, you use this account to put the equivalent of a car payment in savings every month.  This allows you to be prepared to upgrade vehicles or do extensive repairs if needed.

Imagine if you were putting $500/month in this account.  In one year, you would be able to upgrade your vehicle by $6,000 and not have to have a car loan.  How awesome is that?!

If you aren’t quite at the point of saving an entire car payment every month, it is still nice to have some savings for car repairs so you aren’t blindsided by them and unable to recover.

Use the FREE Bank Accounts Worksheet to decide what accounts will be best for you!  Gain access below!

If you create basic categories within your bank account, you will find how much more organized your money is.  Go NUTS!  Make 20 different bank accounts if you want to. I have found these 7 accounts (including our basic checking account) allow us to be successful, but your life may look very different from mine.

What are you waiting for?  Get those accounts set up today!

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