A neat way to "budget".

[mommy4ever]

I think I found a way that will work!!

I was reading online and found a neat idea.

I was 1/2 way doing that already. Now I'm fine tuning it.

I've read it, and I've done it. The debit card is a dangerous thing. A tendency to over spend. In this house it is, but cash is worse. If it's here we SPEND it ALL.

We have several accounts. One LOC is attached to one of dh checking accounts. That's fine. We don't have ready access to use debit on the LOC, so we just deposit for the auto payments. Dh other account(different bank) is where the mortgage is debited. The LOC at that bank is a balance of $0(WOOOHOOO). And car and house insurance.

I have a free checking from which everything else is paid. This is a dangerous thing too, as I prefer debit over cash. A savings that has no debit card access(online transfer only).

SOoooo... my "revised" plan is this. I just opened a second free checking. This one has $0 over draft. I'm going to transfer our discretionary spending here. this is gas, groceries, irregular spending budget(clothes, kids b'day parties) etc. This way my bill money is SAFE. I won't touch that one. I will set up post dated payments(why not earn a little interest on my money) at the beginning of the month, rather then pay it all on the 2nd. I'll transfer the "savings" part to the savings account, and the discretionary to the other checking. I like the discretionary account that has NO over draft, when it's gone, it's gone. now.... At the end of the month, anything left over in that fund will be snowballed and we start fresh at the 1st of the next month!


The first of the month is when I get paid. I have all my household bills by then, all the credit payments I have a fixed amount that I pay for each, (more than the min), so Iknow the totals. I'll transfer the discretionary out, the savings out. And set up the post dated payments. Total no brainer. I won't need to worry about checking my register at each purchase. I hate when I use over draft.(I haven't in nearly a year!!).


Income --> Deposit to checking 1. ----> transfer to savings and account 2.

Debit only from account 2. All household, direct withdrawl from account 1. No stressing!! I have padded the savings with an extra $200 in case we have something come up.

I really like this idea!!!

[Holly]

It would be way to confusing for me .
I get my check, cash it, get money orders to pay bills. thats about all my brain can handle right now.

[mommy4ever]

money orders are nearly $10 each that would never work for me. Love doing things online, easy access and very very simple.

This is essentially what I do now, only now there's no risk of over spending, and my money can earn some interest.

[knitnmom]

It's exciting when you figure out what works really well for your family. I love it!! Good job!!

[FrugalMomof3]

It's not a bad idea, I usually just pay the bills first, then put in savings, then spending is done from the same checking acct. It works for me so this will work for you!

[mommy4ever]

Have a few auto withdrawls which is why i opened a second. it's totally free, even checks so it keeps it neat and tidy

[mom2matty]

Sounds like a great plan that is working for you! I also have 2 checking accts and a savings acct. I did it because I needed a place to put 1/2 the mortgage payment each month........got tired of stupidly getting into it and then having to juggle and struggle at the end of the month when the full payment was due! This works for us, can be confusing but it works!!

[mommy4ever]

EXACTLY!! That's what I'm finding. I make the big extra payment and end up short for something else because I dipped in accidently.

[mmy2grls]

nice to find something that works for

What I do is have a savings account with no debit card, the credit union is 40 miles away so I can't just get money out easily. When I have checks from rebates or mystery shopping I mail them in to be deposited.

I have a debit card that my pay from my jobs get direct deposited onto. I pay bills online from that, I get cash back at the grocery store with no fee for spending. I can also transfer money to my savings account at the bank also. I only use the atm to withdraw money for rent and to pay the electric.

[Holly]

Money order's here are $1.00 at the post office.
.69 cents at Kmart

[Frugal Nurse]

I used to use that system. Using different accounts for different things.

It worked for me. Although it was a lot of work ~ balancing out 4 different accounts every month. I was getting so mixed up on where the money was that I was overdrawing all the time. I thought the money was in 'this' account and it was not. After a couple of years on that method... I learned~ Discipline.

I used the 'envelope' system.
One envelope was spending money.
I brought that with me. I wrote down the date, amount and place where I spent.
Another envelope for groceries- same thing.
Any discretionary money was in individual envelopes.

I learned to discipline myself because some weeks I was out of spending by the end of the weekend and would need to wait until Thursday. OUCH


I also noticed something else.
It is much harder to part with cash in the PAPER form than the PLASTIC form. It hurts.

I couldn't do monthly envelopes at first (b/c I wasn't that disciplined) so I did weekly envelopes.

It effectively allowed me to live on the bare minimum, pay off large debt and essentially learn to manage money.

[Dad_of_4]

Sounds like a great plan that is working for you! I also have 2 checking accts and a savings acct. I did it because I needed a place to put 1/2 the mortgage payment each month........got tired of stupidly getting into it and then having to juggle and struggle at the end of the month when the full payment was due! This works for us, can be confusing but it works!!

We pay our mortgage in two payments per month. Half each payday. We set this up to auto transfer the day after payday. By paying half 15 days early, we will cut almost 2 years off the life of the mortgage. Plus no chance of coming up short, because it is the first thing paid.

[bumplett]

that was way too confusing to me -

we only have one checking acct, one reg. savings and one ING.

I like my math simple. If the $ is there, it's there, if it's not - don't spend it.

[crazyBMB]

thanks for the idea

[dkhd]

I have the same thing going ( and then some)

At my current bank, we have 3 accounts:

Checking ( where the paycheck is deposited and bills are paid from)
Savings ( Emergency Fund)
Life Checking Account (our debit card is linked to this account-- we keep a pad in here and it's the overdraft for the checking account)

We live on cash 95% of the time but if something comes up it's nice to know that the life checking account is there. So many times I had to take my son to a last minute appointment and couldn't stop at home for cash.

We also have 3 accounts at ING savings--- Escrow, Son's savings, and Car Fund

I love to be organized too!