Checking Accounts for Budgeting

[djglenn]

About a year ago I opened up several free checking accounts at my local credit union. I've been using them as a way to budget and want to see if there are others out there doing something similar. All of our new money goes into our "Deposit" checking account. Every two weeks we sit down and move the cash from Deposit into our other accounts.

One of those accounts is the Bills account. I built a spreadsheet that calculates how much I need to put in so that I fund each bill equally from each paycheck. This has really evened out our cash flow for bill paying.

Then we fund our two personal checking accounts, our grocery, household and everything else account. We have personalized debit cards so we can always tell which account the card is for.

This has literally saved me thousands of dollars over the last year. The biggest reason for this is having real-time information about how much we have left to spend. It doesn't force us to live withing a budget but provides us information while we're at the store on how much we can spend.

Anyone else doing this?

[krantcents]

That is a lot of work! I used my saving s account to accumulate my annual expenses such as real estate property taxes, insurance etc. I used a spreadsheet to establish my budget and entered my actual expenses on a subsidiary sheet that would total against my budget. I then managed my budget based on exception when expenses exceeded my budget. If your system works for you stick with it, but it seems like extra work.

[djglenn]

Thanks for your reply. I actually spend very little time on it. I spend about 20 minutes every two weeks moving things around. I use a mobile app to check my balances. The biggest time saver for me is not doing any accounting. The bank essentially does my bookkeeping for me. I failed with other methods before because I didn't keep up with the accounting and therefore didn't know where things stood.

Before mobile apps this method wouldn't be feasible.

[disneysteve]

The biggest time saver for me is not doing any accounting. The bank essentially does my bookkeeping for me.

This concerns me a bit. When you say you aren't doing any accounting, what does that mean exactly? You still need to record all of your transactions. You still need to balance your checkbook each month. If you have multiple accounts, that means a fair amount of time balancing everything. Even if you only have a handful of transactions each month in each account, it must be a lot to keep track of. You shouldn't ever assume that the bank is always right because that simply isn't true.

[snafu]

If it works for you and you like it...don't mess with success. Credit Unions are a terrific, if under utilized financial resource. their mandate doesn't allow the sleight-of-hand money management of major banks. I've not yet jumped into using my cell phone for finances. I like mint.com. I've used a spreadsheet to match budget to actual sums spent. I see it as my ongoing challenge to try to find ways to reduce spending while all around me I see costs increasing in the categories that slurp up our disposable income.

[djglenn]

Let me clarify about the accounting part. I use quickbooks to do my accounting but it's purely a historical record. Using our accounts the way we do is actually a very good monitor of what's going through each one. We look at the activity each day through the app. I don't rely on me doing the accounting to know how much to spend at the store. I can't keep up.

It is rather cumbersome to do a full accounting for each account in QB and to reconcile for each month and I'm a CPA. This approach works really well for my wife who would never check the bank balance or have any real idea how much she was spending. Now she logs into her app at the store and knows she what she can spend. My method is a very effective at decision making but doesn't lend itself to easy bookkeeping.

Thanks for all your feedback! My co-workers give me a bit if a hard time for having all these accounts but it works so well I don't think I'll ever change.

[cooliemae]

I do a very similar thing with Capital one 360....my accounts are savings accounts though. I have our paychecks allotted out for direct deposit into the particular accounts such as insurance, car fund, utilities, etc.. Then I just have money taken out of those accounts directly, or at the end of the month I might need to transfer the money from one account to the main account to pay off the credit card.

I do like doing it like this so that the ups and downs of utilities and insurance costs are averaged for the entire year.

[feh]

Anyone else doing this?

Nope.

One checking account, one credit card and mint.com tells me everything I need to know.