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**Budgeting Made Easy
Using Multiple Accounts**
Do you struggle to stay on budget? Budgeting can be a big hassle, which is why a lot of people hate to budget. I used to struggle with budgeting. It is such a hassle having to remember to track where every penny is going.
It takes time and commitment to stay on top of a budget. Every time you go out to the store you need to remember to record how much you spent.
Budgeting Made Easy
Personally I am such a scatter brain when it comes to budgeting the old-fashioned way. I always forget to update my budget. Then find myself off track with my finances, that is until I starting using multiple bank accounts to track my spending.
What I love about using multiple bank accounts to budget is that, after the setup is complete, it takes little effort to manage. Since I started using this method, I no longer find myself off budget and spend little time managing my finances.
The way that budgeting with multiple bank accounts works is by having an account for all your major budget categories, such as monthly bills, groceries, emergency saving, entertainment, etc.
How To Set Up A Multiple Account Budget
You may be thinking that managing multiple bank accounts will be more work, but trust me it is not. Here is how to set up your budget with multiple accounts to save you time and money.
First of all, check with the bank you are currently doing regular business with to see if there are any extra fees in having multiple accounts. Mine does not, I just need to keep a minimum of $25 in my main account and that is it. If your bank does charge, then shop around for a bank that doesn’t.
You should also check with your bank to see if they are able to link all your accounts to one online account. You want to be able to log into one account to see all your balances at once. This is not a necessity but it sure will save some time and energy.
Another option, if your accounts are not all at the same bank, is to set up a Personal Capital account. Personal Capital is free to use and will allow you to see your entire financial picture in one place to make it super simple to manage everything.
The only accounts that don’t necessarily have to be through your main bank are the ones that you don’t need to access often such as your retirement/401K, emergency saving, and other investment accounts.
Funding Your Accounts
Once you have your accounts set up, the next step is to fund your accounts with the amounts allocated for each category. Set up automatic money transfers from your main account to move the dollar amounts needed for each category into their respective accounts on a weekly basis (or bi-weekly if that is how you are paid).
Again if your accounts are not all at the same bank, then you could have a set portion of your paycheck to be deposited directly into those accounts through your employer, if they have the ability to do it.
Types of Accounts to Set Up
You will need to consider how many, and what types of account to set up based on your needs. Everyone has different financial pictures and different priorities when it comes to saving for certain wants. I’ll give you a summary of my accounts so you can get an idea of how it works.
Fixed Household Bills
Having a fixed household bill account should be an account that everyone has. This is the account I use to pay for all fixed monthly bills such as mortgage, loan payments, cable bills etc. Basically all the bills that are due on a monthly basis and are a fixed amount.
I use my variable bill account for irregular bill that fluctuate from month to month such as electric, water bill and things of that nature. This account is also used for bills that are due quarterly, semi-annually and annually like property taxes, insurance premiums and trash disposal.
Figure out about how much all these bills total for a year then figure out how much you will need to set aside on a monthly or weekly basis.
Spending Money for Him and Spending Money for Her
These two accounts are something you should really consider if you have a partner. My husband and I both have our own spending accounts for everyday expenses and splurges or to do whatever we want with.
We deposit the same amount of money into each of these accounts. This definitely helps if one of you is a spender and the other a saver. It’ll save you from having little arguments about each other’s spending habits.
This account is used strictly for groceries. So if we happen to go over on groceries one week, the we can make up for it the next by getting creative in our meal planning to make up the difference the next week.
This account is for things like eating out and family activities such as spending the day at the zoo. Once the money is gone for the month, then no more dining out, and finding other way to have family fun without spending money.
An emergency savings should definitely be another must have account. If you don’t have an emergency fund, then you really need to start one. You will be so grateful to have it when you get hit with unexpected expenses.
A retirement account is another must have. Retirement accounts usually are one of the last things people who are struggling want to think about, especially if you are younger. Time flies, the earlier you start the better, even if it is just a small amount weekly, every little bit helps.
Having an investment account is an awesome way to grow your money and savings. I am not an expert at investing but I found an easy way to invest without having to do a lot of managing or researching by creating an Acorns account. Acorns invests your money in a variety of funds based on your risk tolerance, which makes it so easy, and it doesn’t cost you a thing in fees.
Saving for Wants
My last account is a “wants” saving account. Any little bit extra that we may have in our budget goes into this account to save up for things we want, such as new furniture, vacation money and similar stuff that we don’t actually need, but can afford to have because we have taken the steps to save for them.
Once you have all your accounts set up, and have taken care of automatically funding them through transfers or direct deposit, you will see how easy it is to stay on budget. There is one more step you should consider to save a bunch of time. You should set up auto bill pay for all your regular monthly fixed payments. You can read a post I wrote on how to “Automate Payments to Save Time and Money”.
If you are like me, then this just could be the easiest way to stay on budget without spending a bunch of time managing it. Try it out and let me know how this method works for you!!
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