Then, I came up with an ingenious solution: I took the old tactic of multiple savings accounts and twisted it—I opened multiple checking accounts.
- First, I figured out my monthly nut (more-or-less fixed expenses like rent, car payment, child care, etc.). Now I keep that amount in my main checking account, at Bank of America. That’s my bills account.
- Next, I identified how much CASH I needed each month for variable expenses like groceries, diapers, Vanity Fair, gas, babysitters, and occasional cocktails with Ramit.
Why it works: Now I can call up the balance in my spending account on my iPhone, and I know exactly how much money I can spend. And I never “accidentally” spend the money that’s meant for bills.
For savings, I automatically transfer $50 from checking into three different savings accounts each pay period so that I don’t overspend on clothes, gifts or travel.
Yes, it takes some time to get everything coordinated (and for your debit card to arrive), but trust me—it's a minor investment of time for a big gain in sanity!
Check yourself. What tweaks have helped your budget better fit your life?