I’m back! I apologize for the absence. There’s been a lot going on in the background of Charming Imperfections that took all my blogging time, but I’m here again ready to wright posts.
Brian and I are both “savers”, which some would say you can’t marry someone with your money personality type. For us, it works really well. Where some couples argue the most over money, we bond over it. We love talking about new ways to save and stretch our dollar. That is how we ended up with a bit of a non traditional way of budgeting. Although this method is somewhat new to us yet as we only started in August of this year, I’m pleased to say it has worked for us so far.
We have 6 bank accounts.
Yep, six.
That’s a few more than the usual family’s one saving and one checking account.
What do you put in all those different accounts, one might ask. How do you manage them? Well, today I’m going to tell you.
It all started when reading this wonderful blog, Fun, Cheap, or Free. It made so much sense, I asked Brian what he thought about trying it? He was on board.
Family Savings
We opted out of one of the seven accounts and combined it with another. So, the first of our bank account I’m going to describe is the Family Savings account. At Fun, Cheap, or Free she has separate Family Savings and Emergency funds, but at the time of setting it up we didn’t want things to be too complicated and this was an easy one to combine.
Anyway, what’s in the Family Savings/Emergency fund? The emergency part is important. It is recommended that you start with at least three months of the bare minimum of what you would need to live in case of an emergency that would cause you to lose an income. You would then build from there to six, even twelve months worth. This is the money that you absolutely don’t touch unless it’s a real emergency. As savers, we have no problem with that, so that’s why it works to be combined with the Family Savings, but if you have trouble having money and not spending it, you probably should put it in a separate, harder to access account.
The “family savings” part of this account is just that, a savings account which you would use to save up for the big, pre-planned expenses such as a new car (or minivan in my case), down payment on a house, or remodeling expense, or, you would use it for the larger, unexpected expenses like a car repair. Anything that you wouldn’t budget for on a monthly basis.
So, that was the holding tank.
Family Checking
This would the be “home base”. This is the account where your paychecks go and your bills are paid from. Money doesn’t stay in here long, which is fine. It’s actually meant to be emptied (or at least as far as the minimum amount required by your bank) every month. If there is leftovers accumulating, you put them into your savings account.
The bills that you pay from here are the ones that are expected and constant, like electricity, garbage pick up, cell phones, internet, etc. If you can put those on auto-pay, that’s great. Then you don’t end up with fees for paying things late because you spent all your extra time blogging….anyway….
Wife Checking
This is the fun part. I get a checking account and so does Brian. Now, the money in these accounts isn’t just “fun money” as I first suspected when reading Fun, Cheap, or Free. The Wife Checking account is for all the things I would buy for the family that month. Things like groceries, my own gas, clothes, or baby supplies. The reason for having a separate account for these budgeted expenses is to make it easier to keep track of how much you are spending per month and to make it harder to overspend (because if you use all the money you get slapped with an overdrawn fine…not speaking from experience)
One important thing is to figure out what you normally spend in the categories allotted to the wife’s account and only put that much in. Do this by looking at what you spent in last several months and take the average of those amounts. It’s tempting to add extra into your account for the “just in case”. You know what, if that extra is there, you’ll spend it, almost guaranteed. I would at least, so it’s better not to add it. If there is a month where you need to spend more (like right now with all the Christmas stuff), then, best case scenario, plan in advance, talk to your family/husband about why you need a little more in that account this month, or, if you didn’t plan and are close to running out, then have that family meeting about transferring more in during the month. The point is, you have to take that extra step in order to “overspend”.
Now, lets say you were extra careful one month, and took a little extra time getting the best deals and were under-budget for a month, leaving leftovers in the account. Well, that is yours to do with as you please! Spend it on yourself, put it in your savings account….whatever YOU want
Husband Checking
Much like the Wife Checking, this is whatever budgeted expense the husband would spend on for the month. For Brian, these are: his own gas, going out to eat/entertainment, and extra donations. It’s considerably less than my account, but that’s ok.
The same concepts of only putting as much as you need and using the leftovers as you want apply here.
Health Savings Account
This is a bank that specifically deals with medical expenses and, therefore, is tax-free. They give you a debit card to use only at pharmacies, doctors offices, and hospitals. It acts like another savings account that you put money into, let accumulate, and use for unexpected expenses, but just medical expenses.
I’ll be honest, I’m not sure I want to keep this account. We’ve forgotten it more than used it and I don’t believe the “tax-free” part saves that much money, at least not for us; a family that does not have a lot of medical expenses.
Slush fund
Ah, now for my favorite account. The Slush Fund is the best. This is your savings for “fun money”! The little bits extra that you find you may have after every bill is paid, every savings account added to, every tithe made…then you can put that money into the slush fund. It may be slow to grow, but that is what you get to spend, guilt free on yourselves for fun. You could save up for a vacation, a pet, a hot tub, etc. Anything that would give your family something fun to do together and look forward to. Seriously we love having this account.
Tithe account
Currently, we don’t have this account, but I know many who do and I’m thinking of switching the Health Savings to this. My parents tithe account has been a huge blessing to them. The 10% (and more) that Jesus said to give to the poor is put into this account and then whatever charity they encounter comes from there. Sponsor kids, church donations, meeting someone randomly off the street that could use a few extra bucks; these are the things you would use your tithe account for. For Mom and Dad, it was freeing to feel they can give without having a single thought of worrying about if it’s cutting into your grocery budget or what have you. This does need to be a checking account so that you can use the checks.
Managing Six Bank Accounts
How do we do it? One little word: Mint. Mint.com is this amazing, free website that takes the information from all your accounts so you can see it all on one dashboard. They have budgeting tools with lovely little sliding bars that turn from green, to yellow, to red depending on how you are doing with spending in that category, saving planners to help you know how much to put aside to save towards a pre-determined goal (and more sliding bars to show your progress), and bill reminders. It’s all your information in one place, which helps immensely in knowing exactly where you are financially at any time.
Another great resource is our own bank’s online banking accounts. These also give a picture of what is in each account, the ability to do transfers, set up accounts, chat live for support, and budgeting tools. If your bank offers this, take advantage of it. It’s so nice to be able to do all these things online, at home, especially as a Mom.
Ok, that is how we manage our money. I hope this was useful to you and if you have any questions feel free to ask.
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