Why I Have 14 Bank Accounts
Your finances can make or break you, so it’s time to get them in order! Organize your money using this bank account strategy and make it work for you!
This post all started because I spoke at a financial workshop at my church and I mentioned I had 14 bank accounts. Afterwards I was asked a lot about this method and how it works for me. There were 3 reactions – interest, shock, and confusion. Everybody wanted to know why I have 14 bank accounts.
Why I Have 14 Bank Accounts
Managing money this way has simplified my life. Having multiple bank accounts has helped me get out of debt, stick to my budget and stop living check to check. Before using this technique, I found it extremely difficult to keep track of everything in one bank account.
Having several bank accounts may seem strange or overly complicated, but it is not difficult at all. Since I started using this method, keeping track of money is very easy for me. It’s easier to track my spending. Plus, I’ve been able to save more money using this strategy.
Here’s a breakdown of the various bank accounts I use to help me manage money better:
1. Main Checking Account
This is where all my direct deposits go into. There is no auto pay connected to this account . Period. I earned this money and ain’t nobody allowed to go up in here and take my money. Nope. Mind your business. There no this is company A company B money at this point. So, my income is directed here and then transferred to one of my other bank accounts.
2. Rent Account
Twice a month half of my total housing payment is transferred here. I started this practice back in the dark days, when I was $60,000 in debt. The benefit was fantastic, and I wish I always did this. Here’s why: I was able to stop worrying about being short, being late, and being concerned about any overdrafts. Each month there are only 3 transactions. Two transfers from my main account and one check to the landlord.
The method can work for your mortgage.
3. Non-Monthly Bills Account
This is were I deposit money each month for my bills that are paid quarterly, semiannually, and annually. This started because I was tired of stressing out trying to come up with hundreds of dollars to pay my car insurance.
Initially I called the company to see if I could switch the payments to monthly, but I would end up paying so much more. So, I decided to simply break up the payments. All I do is divide the bill by 6 and made those monthly payments to this account so when the bill came due, we have the funds.
4. Vacation
I put money here to plan for my long term and short-term trips. This helps me avoid credit card debt because I plan the payments in advance for where I’m going and set aside money as necessary to this account.
5. Car Repairs and Maintenance
When you have a car, anything can happen. You may need a new battery, to change your tires or get in a major accident with a high deductible, because the insurance company doesn’t always pay for the damages in full. This is where this account comes into play for me.
6. Car Fund
Yes, I have another car account, but it serves another purpose. It will help me save for a vehicle. I never want to take out a loan for a car ever again. To make this happen we believe in self-financing our cars. Rather than pay a bank a car note, we make the “payment” to myself and place it into a savings account. Allowing me to have the cash to purchase another vehicle if and when I need to do so.
7. Emergency Fund
Well, life happens. Unexpected expenses happen. That’s a fact! People get sick, laid off, divorced, things break. While we can’t stop all of lives unfortunate events… Having a cushion between you and life makes all the difference. Since emergency situations will happen, having funds set aside will help turn emergencies into inconveniences.
My emergency fund significantly reduces financial stress along with the burden and frenzy of having to find the money to handle life’s ups, downs, twists, and turns.
For more info and tips on saving for a rainy day check out this post I put together on Emergency Funds.
8. Christmas Savings
Though I love Christmas, and strive to not get caught up in the excessive consumerism of the holiday season, I do enjoy giving gifts. So, my wallet doesn’t end up with a debt holiday hangover I plan for gift giving in advance.
Some banks offer Christmas club or holiday savings accounts. But I do it myself. I come up with how many people I will give gifts to then we allocate an amount to avoid overspending. For more tips on how to have a debt free Christmas check out this blog post.
9. All the School Stuff Bank Account
I don’t like having to find money to pay for the many school “whatevers”, so I prepare in advance. There will be numerous events like picture day, trips, book fairs, bake sales, additional school supplies, etc. I look at the previous year to get an estimate and then save money each month throughout the year for these things. I know what her tuition and after-school fees will be, and they all go into this account.
10. Child Savings Account
My daughter has a savings account. Any money that she may receive for birthday’s, Christmas, and money she earns doing jobs around the house (I do not pay her for chores) is put into her own separate account with her name on it.
11. My Fun Fund
Each month, I budget “fun money” for myself. Yes I do. It’s necessary, but only AFTER taking care of all of my household bills and budget items. I love this! I get to do whatever I want with this budgeted amount, without carrying the stress of did I overspend and mess up my budget.
For example, let’s say that after everything is taken care of financially there is $300 left. Then my fun fund gets $300. I have a debit card for this account for two reasons, so that I don’t overspend and mess up my bills have and don’t have to carry all cash if don’t feel like it. For the married folks there is one simple extra step. If there is $300 left you both get the same amount $150 for your individual fun fund.
12. 1st Home Fund
One day I would like to own a home, and would prefer to buy it without a loan. If that doesn’t make financial sense once I’m ready, then I’d like to take out a 15 year mortgage and pay it off quickly in just a few years. If not the 30 year will have to do. It’s all about having options. To make this a reality I’m setting myself up now to be ready when the time comes.
13. Opportunity Fund
I use this bank account to help build my retirement funds or store extra cash that I made for other opportunities. For example, I may buy a used designer piece from a thrift store, and then turn around and sell it online to make extra money. The extra money that I’d make is then used to either build my retirement funds or to put more money toward another long term goal of mine. When I had a bunch of debt, I would use funds from this account to help me pay it down faster.
14. Jesus Account
This account is very special to me. I’m so thankful to God for everything we have. So, I wanted to have a checking account dedicated solely to giving at our church. At the very least 10% of my gross income is placed in here.
When I was super struggling financially it took some serious discipline to not look at money just sitting in my account. Although, I never spent this money, I didn’t like the mental battles I was having. Like oh, I’ll spend this little bit and put it back later.
This separate account was very helpful back then to eliminate the temptation of not giving because its was – separate. Thankfully, the conflict faded somewhere along my debt free journey. I only write checks out of this account.
So now you know why I have 14 bank accounts
If you only take one thing away from this blog post, I hope it’s this: Having multiple bank accounts just may help you manage your money better. It’s a system that is extremely easy to maintain, and it’s not very complicated at all. My family has been able to save more money and build wealth using this method.
So now you know why I have 14 bank accounts. It’s to organize your life, money, and save yourself some stress. I hope you are able to find a way to make this system, or something similar, work for your family. If it helps even a fraction of how much it’s helped my family, I am happy for you in advance.
why i have 14 bank accounts
