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More Bank Accounts Can Help Your Budget

Just typing that out makes it sound excessive. But hear me out before you tell me how you don’t have time for that!

My 12 Bank Accounts

With the exception of one Savings account, the rest are all under one account. This makes it extremely easy to use and manage. Everyone has different needs but here are the 12 accounts I have:

Regular Savings

Primary Checking

HOA/Escrow

School

Sinking Funds

Birthday/events

Auto

Christmas

Medical

Grocery

Vacation

Capitalone 360 Savings

Set Up

The first 11 accounts are all in one account which allows me to transfer between them. When I make my budget every month my goal is to have $0 left over from my check and every penny designated to a bill or an account. Let me explain briefly what I use each account for.

Regular Savings– We don’t use this account too often. It has money in it to cover my other accounts in case of overdraft for some unforeseen reason.

Primary Checking– This is where my paycheck goes every month. I leave the amount for all bills that will be coming out in this account.  My car payment comes out of this account and has nothing to do with the auto account. I try not to have extra in this account.

HOA/Escrow– My HOA is extremely cheap so this may sound weird to some but I find it easier to just put away the money each month so that come December I know I have it and don’t have to worry about coming up with it around the holidays. I also like to add extra in here for the chance that my escrow account falls short. If we do not need it when the time comes I just apply the extra amount to the principle on our mortgage and start over again for the year.

School– Now that my daughter is in middle school this account isn’t as needed as it was for elementary. However, I still find it useful. I place money in this account for school clothes, lunches, school supplies, field trips, sports cost, school fee’s, etc. Plus next year she is taking a field trip to Washington DC. We have started saving up money for this trip in this account so it’s not a panic to come up with it all at once next year.

Sinking Funds– Ok so full disclosure on this account. It does seem kind of redundant to me considering I have accounts set up for almost everything that could fall under a sinking fund category. My thought process however when I set it up was this: Let’s say my family went crazy with their hotspot and our phone bill was $100 more than I was planning. I do not have a phone account and so the $100 would come from the sinking fund account. I use anything that is “extra” in my pay to deposit in this account.

Birthday/Events- I like to figure out how much money I need for the year for birthday gifts and break it down by pay periods how much I need to save. This also includes a birthday party for my daughter. We also like to host events, like our pumpkin carving party. I have a separate debit card associated with this account to use only for these items.

Auto- Everything related to my car beside car payments. I budget gas money and a certain amount to go in every month. I have a debit card associated with this account and use it for gas, tag renewals, and car maintenance.

Christmas-  I figure the amount of money I want to spend for Christmas and add to this account every month. I have a separate debit card for this account to allow me to shop year-round for great deals on gifts. Stay tuned for my post on a debt-free Christmas!

Medical- Money set aside to cover any out of pocket medical expenses.

Grocery- The money I budget for the month goes into this account. Similar concept to the cash envelope system, however, I am horrible with cash. It has the opposite effect on me. But that is a whole different story you can read about why cash doesn’t work for me.

Vacation– I love taking vacations. I am currently making a bucket list of vacations! We budget into this account and use it when we decide what vacation we want to do.

Capitalone 360 Savings- The Majority of our savings goes into this account because it is a higher interest rate than my local bank. It is separate from my accounts and transfers take a few days. This keeps me from spending money from it. You earn 1.0% on your balances and there is no minimum amount required.  You can read more about the account benefits and earn a bonus with my referral code here.

Properly using Accounts

Every payday my check is basically divided into these categories as designated by my budget. For example, if I have $75 in my budget for groceries I transfer that amount into my grocery account. I leave only what I need to cover my bills into my checking and the remainder all gets transferred into their designated accounts. This has stopped me from just spending what I thought was extra money!

I would love to hear your thoughts and if you have tried this system!