I realize many people reading this probably think that I am insane and that 7 bank accounts, (yes, I said seven) is a ridiculous and completely over the top and possibly even random amount. Well, I thought that as well, until I did it. Before I decided to take action, not fake action, but real action, my husband and I were drowning in financial crap. It wasn’t that we weren’t making enough it was just that we were not able to manage our money properly. We were doing this for one month before we both got laid off at the same time. Now, we had also recently purchased our home and had a mortgage to pay as well. During the time we were laid off we went from making around 1500 dollars a week to just under 400 dollars a week between the two of us. It was a bit of a shock. However, we were still able to pay our mortgage and all of our bills, buy groceries, occasionally go out, we still went to the bar on weekends with our friends, we both still smoked cigarettes, we saved money, a lot of money, and we were still able to buy things that we wanted and probably did not need. Granted, we could have cut back more in many areas, but I am 500% convinced that we would not have done any of this without the 7 bank accounts. I will take the time to explain each account by explaining what it’s purpose is, how you use it, what you use it for, why you need it, and why it’s important not to skip. When I first had this idea I made a list of everything we want to save for and everything we do spending-wise. I decided I only need four and that 7 was a little bit extravagant. I opened the accounts and it went well for a while, but then I decided that I really did need that other account, and the other one, and the other. Next thing I knew, I had all 7 and they are really working out for us. Here are the names of each account and I will go on to explain each:
1. Bill Checking
2. General Savings/Family Savings
3. Wife Checking
4. Husband Checking
5. Fun Savings
6. Medical Savings
7. Emergency Savings
Most of these are pretty self explanatory, however, there are points that may persuade you more in their favor and you may not think of all of the benefits at first glance.
1. BILL CHECKING
Obviously the bill checking is for bills and only bills. You should have your paycheck direct deposited directly into your main checking account and from this checking, the allotments are disbursed throughout your other accounts as weekly or monthly bills. This checking account is solely for bills and not a penny should come out of this account for anything other than bills or disbursement to other accounts. I’m assuming most of you have online banking through your bank and are able to view all accounts at any given time. This account is where you know the amount you make and the monthly amount for every single bill you pay out on a monthly bases. Your Bill Checking should NEVER be less than the total amount you pay out monthly. If you are just barely scraping by, don’t be naive and cut back on your bills in any possible way. Carpool, live without cable, go to Straight Talk or another prepaid phone service, eliminate home phone if you have a cell, anything you can do to cut back. No matter how much you pay in a weeks time your Bill Checking does not go below the full amount of monthly bills paid. I can not stress this enough for a number of reasons. First, if something happens and you are unable to receive pay one week or month and you are not accounting for a mistake or emergency like this you will be in deep crap! I can’t count on all my fingers and toes that my monthly automated payments have come out at the wrong times or been pending for too long and had 4 or 5 large payments come out on the same day for whatever ridiculous reason the bank decides to throw out this time. DO NOT GET CAUGHT IN THIS SHIT! A lot of banks do these things on purpose and change dates so they can charge you fees. Be prepared for unexpected occurrences, charges, mistakes, anything at all by allowing some breathing room. Once again, nothing aside from bills comes out of this account. You will be setting up recurring weekly or monthly payments out of this account to your other 6 accounts, these are considered as bills when leaving this account. The same goes for the other accounts, you should not be taking out of any of the other accounts to pay bills. Hence, Bill account.
2. GENERAL SAVINGS/FAMILY SAVINGS
This savings account is the one you and your family will use for things that affect your family. If you want a pool or an addition on your home or new appliances or a new vehicle or want to make investments financially, in your home, or in your future or anything at all. This is the account you will use if your dog chews your couch and all of a sudden your family is coming over for Thanksgiving and you need a new one NOW. This is a situation I have been in, (in case you were wondering it only took Riloh4 days to chew the new couch…). If your car breaks down and you decide you want a new one that doesn’t suck, this is the money you use to invest in your family’s needs. You might decide you need to redo the bathroom or you want to purchase a piece of land or you have to pay school fees or haircuts or buy books or birthday gifts for the family. This could even be the account you choose to use for Christmas gifts. The possibilities are endless. Do not confuse this account for the Fun Savings. This savings is not by any means for fun it is for family necessities and novelties. NOT FOR FUN. You will not use this account to go on a vacation or go on a shopping spree. Don’t worry, there is an account for that! This account is basically for family and household related emergencies that do not threaten you in any way. As far as the amount you put into this account, it really can be anything you decide you can afford. If you can only put in 5 or 10 dollars a month, that’s all you can afford. No need to feel worried or like this isn’t enough. Even if you saved one dollar a month into these accounts, it’s helping a hell of a lot more than not saving at all. I personally started during our lay-off period at $50 per week going into this account. I was unsure how this would work at first, but we were able to continue this amount weekly throughout the time we were laid off and now that we are back to work I will be increasing this amount.
3. WIFE CHECKING
How many wives have went out with a friend and somehow unwillingly and completely innocently landed in the clothing department at Kohl’s staring at the most wonderful dress they have ever seen and wondering, “how mad will my husband be?” and “is it possible to sneak this one by him?”. Worry no more wives, this is where it gets good. To make it fair, husband has his own account as well. The money that goes into this account is a mutually decided upon amount and the debit card belongs to the wife and only the wife. In this particular account your allotted amount builds up and if the wife decides she needs a new pair of shoes or she will die, guilty pleasure no more! This is how the wife can spend money on things she wants or needs and not feel guilty, not have to ask to buy something, not have to debate and wonder and be confused or curious when making a purchase. I always feel the need to ask my husband when I want to purchase anything because he’s the real bread winner in this family, and he always says I don’t know, you do the bills! For some reason I always feel guilty later or I don’t do it because somehow it’s not fair. In reality, I buy a lot of smaller things and he buys more expensive items less often. It evens out, but quantity always seems like more regardless of the money. With this checking, you agree on the amount and you don’t have to ask your husband if you can buy something and you don’t need to feel guilty. This has helped my husband and I avoid a lot of fights and a lot of resentment over silly things like money and novelties.
4. HUSBAND CHECKING
Much like the Wife Checking, the Husband Checking is for the husband to use however he wants. My husband, always wants to buy vehicles and tools and all kinds of large expensive items every time I turn around. I always say no or we should wait or we should do this or that. He usually gets all of the things he wants, but it starts with an argument. The things my husband buys are few and far between but boy are they expensive! He sure knows how to get even! This checking allows him to know when he can buy things and when he can’t afford them. He has his own debit card and he has the ability to use it for anything he wants. He doesn’t have to ask his wife permission and get shot down and there is no fighting. The freedom of these accounts really has done amazing things for our marriage. We used to fight so much about money and now if we don’t have it, we don’t buy it and that’s that. Every now and then we will decide we want to put our money together and make a purchase for something larger that we both want, but many times these things turn out to be more family or household items and we can get away with using the General Savings. We both get exactly the same amount of money each week, like an allowance, and however each of us chooses to spend it is our own business. The amount we put into these accounts during our lay-off period was 25 dollars per week each. We really didn’t buy much so at the end of it we each had about 500 dollars to do what we want. I bought a new phone and he bought a big tool box and some materials to build himself a man shed.
5. FUN SAVINGS
The Fun Savings is the account we use for vacations, trips, or even buying toys such as four wheelers and snowmobiles. This account can be used for any type of fun family activity your heart desires. We have used this account to go out on a date and go to the movies when we were laid off and low on money, we used to for our trip to Canada, we were planning on taking our Niece to The Maine Jump, which is kind of like a Chuck E. Cheese type of place and this is the money we would use. This account is never to be touched for anything not fun. No bills, no household items, nothing boring. This account is purely for the fun of the family. Andrew and I like to be spontaneous when we can, so having a little bit of money saved specifically for fun things is good because when we are broke and decide we need to drive to Six Flags in New Hampshire and have a little fun or take a weekend camping trip up north, we don’t need to worry about how broke we are because we put money away just for fun and it’s illegal in our home to use it for anything not fun. We like to go camping over Memorial Weekend and this is probably how we will do it this year. Right now, we put 30 dollars per week into this account and we haven’t touched it. This account has built up fast and I have big plans for it. We want to go on a cruise next year so we are saving this account for that vacation we have been dreaming about.
6. MEDICAL SAVINGS
We all hate getting hurt unexpectedly and ending up with expensive hospital bills. We just not got insurance through Andrew’s job so this account is for copay’s and any other medical type emergency we may have. Andrew got battery acid in his eye a few weeks ago and ended up in the emergency room in a Friday! Can you say expensive! We just got the bill and without this account that unexpected incident would have been financially crippling. I almost didn’t make this account because first we have insurance now and second we never get hurt. Clearly, it was a good idea. Now, when something happens we aren’t trying to “tough it out” and get through it ourselves like idiots. If we need medical attention it isn’t as scary as it used to be. We can pay our outstanding bill and still have money left in this account for future accidents. This account has saved us and I’m sure it will continue to save us, especially when we decide to have children in the future. The amount we put in during lay-offs was 30 dollars a week and man oh man did this pay off for us! The other thing about this account I would like to add is that our bank mentioned Clubs. Now, I don’t really know what it is and they had a difficult time explaining it to me. It’s not a checking account, however it acts exactly as a checking account would. It’s completely separate even though it’s not technically another account, and it can be named anything you want and it needs no minimum balance yet it earns a teensy bit more interest for you. I went with it solely for the fact that I could name it anything whereas I could not with an actual account.
7. EMERGENCY SAVINGS
This account is for emergencies. By emergencies, I mean you are about lose your home or dies or something spectacularly crazy like that. You do not touch this for emergencies such as needing cigarettes once you have quit, running out of gas, breaking down, trying to replace something broken before anyone notices etc…Not those kinds of emergencies, actual real emergencies that affect your entire life and might make your life end. This money does not otherwise get touched ever. For example, when my husband and I were laid off and all of a sudden we realized we were not gonna be able to pay our mortgage and the bank was going to take our home, we would use this money. Another example is if you can’t pay a bill you might be at risk of losing whatever your loan is for such as a vehicle, a business, or hard worked for good credit. I also put 30 dollars a week into this account. We are still building this up and hopefully we will never need it, but if we do, I’m sure we won’t regret it.
As I said, no matter how small the amount and how far between deposits, it is a million times better than not saving at all.
Now, I want to talk about large amounts of unexpected funds such as taxes. We were delighted at the amount of money we received from taxes being the first year we owned our home and the first year filing jointly. Before we knew what we were getting back we decided how much was going to be used for fun money and how much would go to savings. We had a predetermined percentage that we both agreed on we would take out and split between the two of us and the rest would go into our General Savings for our future. We want to build a garage and many other things, so this was the best place for us. I do not recommend putting these types of things into your fun account. There should be a percentage for fun and the rest should be for saving whether it’s medical, emergency, or general. We decided on 15% for fun and 20% for our bill account and the remainder for General Savings.
I also have made some downloadable PDF’s of forms I use monthly and yearly to record tax deductions, monthly bills, and many others. I will post these as soon as I get them up and running, I have had some trouble getting them on here.
Good Luck Guys! I hope this helped, please feel free to ask any questions at all and I will post some more helpful tips soon!