I’ve decided to open a third checking account. Right now, I have two accounts – one business account that holds my income until I’m ready to “pay” myself and another that receives my monthly paychecks. The second is a personal account that I use for paying bills and other various spending.
While most of my bills are paid by the 5th of the month, I have a few that aren’t due until later. It’s those stragglers that can throw off my spending. Until the 22nd of the month when everything is paid, I’m constantly checking my account balance, subtracting the bills that haven’t been paid, to figure out how much spending money I have left.
I can solve that problem by tracking all my spending on my budget and reconciling it with my checking account, but for the past few months I’ve been too lazy to do that. Note: if I were having troubles with overspending and needed to get my budget under control, laziness would be a nonissue. I’d budget anyway.
Keep one checking account that’s used to pay all bills and household expenses (including groceries).
Open a second checking account that will hold my non-bill money. This money will be used for gas, eating out, entertainment, and other discretionary spending.
Having the second account should make it easier to decide whether I can afford to spend more money on non-essentials.
I don’t have to worry about spending the money for my cell phone or electricity bills because it’s in a separate account.
If you have a spouse, you might open two separate checking accounts for discretionary spending to avoid bumping heads on spending. There’s always the question of how much money should you each have in your separate accounts – an equal amount or some other amount based on how much you earn or spend.
There’s another password to remember, another bank statement to check, another check card to keep up with, another set of checks to keep safe, and yet another set of funds to keep out of overdraft.
Budgeting is still required
Having multiple checking accounts doesn’t eliminate the need for a budget. It simply makes managing a budget easier. Even with another checking account, I still need to budget my income to figure out how much money goes toward bills, savings, and other spending.
I also realize that having a separate account just for spending doesn’t give me the freedom to spend as I wish. That money has to last until the end of the month, so smart spending is required.
Any of you use multiple accounts to help manage your money?