I’ve struggled a lot to try to find an easy, effective way to organize our finances. I’ve tried online budgeting tools, using excel, cash, you name it. Every system has failed me. Until now! I think I’ve finally landed on a system that seems to work pretty well so far, so I wanted to share it here with you.
I’ve found that the key to keeping our finances organized and being intentional with our money is having multiple bank accounts. When I decided to get our finances in order, I opened eight separate accounts and labeled them as follows:
This the account that we use the most and is linked to our debit card. We have our paycheck deposited into this account, and after I separate the money into all of our other accounts, we use what’s left for everyday expenses like groceries and gas.
2. Emergency Fund
We almost never touch this money. We have about three months worth of expenses saved up, just in case something were to happen like a job loss or illness where my husband or I couldn’t work. It might seem like a waste to have so much money just sitting there, but it provides such peace of mind to know that we’re not screwed right away if we suddenly lose our income for whatever reason.
3. Big Purchase Savings
This is where we save up for large purchases that we hope to make. It could be for a new car, a remodel, appliances, anything like that. At the moment, most of the money in this account is going towards furnishing our new house.
4. Irregular Expense Savings
This account is such a lifesaver. We have so many expenses that only happen every so often, so it’s hard to figure out how to fit them into a monthly budget. Things like car repairs, Christmas and birthday gifts, clothing, vet bills, etc. So I looked back at how much we spent in each of these categories in the previous year, added all of them up and divided by 12, and that’s how much money goes into that account each month. When those expenses pop up, I just use the money in that account to pay for them, and it almost feels free![spacer height=”20px”]
5. Health/Doctor Bills
We actually have an HSA for doctor and hospital bills, but if you don’t have an HSA, you should definitely open up a bank account to save specifically for healthcare related expenses.
What a fun category! Also self-explanatory. We decided how much money we would like to have to spend on vacations each year, and divided by 12 for the monthly amount to put into savings.
7. Kid’s College
We aren’t putting as much money as I wish we were towards this category, and actually you may want to consider something like an Education Savings Account or a 529 Savings Plan. For us personally, we don’t like the idea of having that money locked away for a very specific person for a very specific purpose. We would rather forego the tax savings that an ESA provides and have a little more flexibility in what we’re allowed to do with our money.
8. Husband’s allowance
We created this category out of a desire for marital peace and harmony. I used to constantly get irritated at my husband for the little things he would spend money on that I felt like was a waste. I didn’t know where to put it in the budget, it would throw off my calculations and we’d wind up over budget. So we decided to give him a little account that he can spend from freely on whatever he wants without having to consult me, and I can rest assured that he’ll stay within those limits and not spend any more than that. Plus sometimes he takes me on a date with this account and it kind of takes us back to when we weren’t married, our finances weren’t all wrapped up together and it feels like he’s actually buying me dinner instead of it just coming out of the family budget, haha.
So that’s our finances in a nutshell! I do highly recommend that you actually, physically separate your money this way. Don’t just keep it all in your checking account and try to keep track mentally of how much is in what category. One, you will probably lose track, and two because it really makes you think twice about spending when you have to physically move money from one account to another. It’s way too easy to accidentally spend your emergency fund on a new couch if it’s sitting in your checking account easily accessible by debit card.
I also recommend setting up auto-transfers out of your checking account if your bank has that feature. It’s so much simpler to just have the money automatically go to where it should be going than remembering to do it each time you get paid. This is true for me at least, because I’m lazy and I would never get around to manually doing the transfers every payday. The auto-transfer function helps us to maintain a level of organization that we just wouldn’t have if it were left up to me.
So there you have it. Tell me your money organizing tips in the comments!
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