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Multiple Accounts for Easy Budgeting

Budgets, like the people who use them, come in a variety of packages.  Our budget lists our basic expenses and a few different savings accounts we push money into every month (few being like 7…).  As the manager of our budget, I find it much easier if I have separate accounts for each of those goals.

Here are the extra accounts we have at ING (currently at 1.1%) and Smarty Pig (currently at 2.15%):

  • Emergency Fund – The cash we have set aside for job loss or anything unexpected that the other accounts won’t cover.
  • Taxes and Insurance – We don’t escrow, so we put aside money every month for property taxes and homeowner’s insurance.
  • Auto and Home Maintenance – Ever since we paid my car off, we’ve been paying ourselves that payment for future car and home costs.  We upped that amount when we bought our house but are keeping it somewhat minimal since we’re trying to pay off my husband’s car as quickly as possible.
  • Roth IRA and Stocks – We put extra money here even though we also contribute automatically to the Roth IRA.  We use this extra money as an opportunity fund.
  • Vacations – We save here for our big annual vacations and our smaller weekend trips.
  • Hubby’s Fun Money – This is for anything he has a craving for.
  • My Fun Money – This is for my hobbies and habits like Shirt Woot.

It would be totally possible to use just one account for all of these, but I like being able to take a very quick inventory without worrying if I remembered to update my Excel sheet that month.  It works for us.

What works for you?

FYI:  I worked at a dead end cubicle job from 2005-2011 for about $30,000 per year.  I went self-employed in July 2011 and make between $70,000-$90,000 through blogging, professional pet sitting, hubby's reffing, and our rental home.  If you’d like to start your own site (link to my free step-by-step guide), I highly suggest checking out Bluehost (my referral link with a nice discount for you, PLUS a free custom header banner from me!).  Please contact me any time at budgetingfunstuff*at*gmail*dot*com with questions or just to brainstorm! I’d love to help!
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April 2010 Net Worth

15 thoughts on “Multiple Accounts for Easy Budgeting

  1. I’ve still got everything at ING. We have 10 different categories right now, all in one account. I just keep track of them in my budget spreadsheet.
    Property Taxes
    Present Club (for gift giving during the year)
    Emergency Fund
    Insurance (Car, Condo and Umbrella)
    Car (for repairs and eventual replacement)
    House (for the new one next year)
    Water Bill (paid twice a year)
    Preschool (setting the money aside now for July)

    My wife and I also have separate savings accounts for our fun money. It’s probably more complicated than needs to be, but it works. I’m just happy that I have money to put aside for all the categories.

  2. We have a similar breakdown:
    Property Taxes (paid annually)
    Auto Insurance (paid quarterly)
    Vacations – this account has only .02 in it! :*(
    Tuition – tax refund goes to kids’ school :*(
    Homeowners’ Assoc’n. (paid annually)
    Vet/Kennel (2 dogs)
    Sewer/water bill (paid quarterly)
    Emergency Fund (short-term)
    Auto Maint./Deductible ($1000 deductible in the event of an accident)
    Home/Appliance Maintenance
    Satellite Radio (paid annually)
    Lawn/Garden (seasonal expense)

    There are other accounts in other places: Book bill for high school, kids’ savings accounts, and long-term EFund, to name a few. PHEW!

  3. Hello Crystal!
    We do have several accounts as well: a wedding savings account (which will now be repurposed for big expenses account, such as taxes, car insurance payments, etc.), we have a vacation account, and we have an emergency account. This is aside from our checking account.

    Also, congrats on your networth update, and the advertisements!!!

  4. I have mine in one account (outside of the emergency fund, that is its own). Reading this made me realize I should probably set the money aside in greater detail. Thanks for making me think!

  5. We do something similar. We each have an emergency fund, then I have an Antarctica fund, and we have travel, appliances/household, and escrow funds.

  6. I have an emergency fund, vacation fund, new car fund, husband’s clothes fund, vacation fund, home repair fund, and charity. Charity is because I usually give one lump sum at a time.

    Some are at ING, some are in SmartyPig.

    The other breakdown lists made me think I should have one for auto insurance. I never thought of that one before!

    When we finally do pay off the more

  7. oops! Tiny foot hit enter before I was done typing! When we do pay off the mortgage, I will probably set up a property taxes fund, too.

  8. It’s surprising how many people admit to doing this. It’s a cumbersome strategy. I thought it was one of those things I was overcomplicating in my life, and that I was the only person in the world who would do such an involved thing. So when I wrote about it was surprised at the number of readers who, like yours, have a slew of special-purpose bank accounts!

  9. Frugal, I only have the one ING account. Just divide up the balances in my spreadsheet.

    BFS, got tired of Christmas and b-days always wrecking my budget. Just figured who i normally buy gifts for and an average amount to spend per gift, then just set the amount aside.

  10. I try to keep my accounts to a minimum. There was a time when I had way too many accounts on the go, and it became too much. That being said, I like to keep my savings goals separated, and use no fee savings accounts for specific goals.
    Thanks for the continuing great content on the site BFS!

  11. BFS-
    Sirius used to cost $135 annually, but a tax was put in place in 4/09 for royalties to the artists which added $25.00, so now it’s $160. I save $14.00/mo. ($168) since I expect the cost to increase each year. DH loves it.

    They have great deals for new customers and you can also opt to pay a one-time cost ($395, I think) for a lifetime membership, which we may decide to do in the future.

  12. BFS, Sirius had a special running when we signed up at $77 for a year. I may sign us up for a lifetime membership when this year runs out.

  13. MikeS, that present club account is a great idea!

    Holly, I’m sorry about your vacation account. That’s stinky.

    oh, may I ask how much satellite radio costs? I’m really interested after hearing my in-laws’…

    Thanks Amanda! I’d suggest turning the wedding account into a tax account…homeowner’s taxes (as you know) suck and sneak up on us every November…

    Kris, glad to help when I can!

    Jackie, an Antartica fund? Where would you like to go in Antartica? That could be a fun post. 🙂

    Mrs. Money, yep, I’m definitely an ING fan too!

    Julie, I love the fact you’re exposing the baby this early to personal finance! 🙂

    Thanks Holly and Julie…my anniversary is just around the corner. I’ll point him this way. 🙂

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