Buzz
While I excel in many areas, managing finances hasn't always been my strong suit. My New Year's resolution to become more financially disciplined has been a work in progress for some time. One effective method I've adopted is budgeting through multiple bank accounts. Here's the reasoning behind this approach, how I implement it, and why it could benefit you as well.
Using separate bank accounts helps me track my spending and manage my finances more effectively
Similar to how I utilize multiple Google accounts for distinct tasks across different browsers, I employ several bank accounts to organize my funds. While I refer to them as 'bank accounts,' some may not fit the traditional definition. Two are conventional accounts—one from my hometown bank and another with Chase. The remaining two are digital platforms: Venmo and Chime. For each, I have an app, a debit card, and, importantly, a structured plan.
For my regular income, I chose to split my payouts 70/30 between my hometown bank account and my Chime account, with portions from both automatically allocated to savings. Earnings from teaching spin classes go into my Chase account, along with income from personal projects or freelance work. Funds in Venmo come from repayments or occasional transfers. Major expenses like bills, groceries, and student loans are drawn directly from my hometown account, which I’ve had since my first job in tenth grade. I keep that debit card out of my wallet to avoid unnecessary spending, reserving it for emergencies. The 30% of my paycheck in Chime is for enjoyable expenses like personal care and daily Dunkin' runs. Spin class earnings in Chase cover essentials like transportation and laundry. Every couple of weeks, I review the balances in my less critical accounts and, if possible, transfer some to Venmo for discretionary spending, such as nights out. If Venmo is low, I either skip outings or stick to a strict budget. For larger expenses, I distribute the cost by moving small amounts from all accounts into Venmo.
Why this approach works for me
"But Lindsey," you might ask, "Doesn’t having four accounts just complicate things? You still have the same amount of money." The truth is, I struggle with budgeting. If I saw all my funds in one account on payday, I’d likely overspend without considering future needs. Having four accounts with distinct balances helps me visualize how much I can allocate to different categories, creating a mental barrier that prevents impulsive splurges, like an unplanned trip to Sephora.
Some people manage this by separating savings and checking accounts within the same bank. That works for them, but not for me. I once tried it, but it was too easy to transfer money back from savings to checking with a single tap. Moving funds between different institutions requires a bit more effort, and that extra step is enough to make me reconsider poor financial decisions.
The only downside to this system is needing a wallet with enough space for multiple cards. Most of my cards, except the "serious" one, are linked to Apple Pay, so I must stay disciplined to avoid using them for unintended purposes. While this method might not be necessary for someone skilled at budgeting, if any part of this resonates with you, it’s worth considering. Setting up the accounts was simple, the debit cards were free, and since adopting this strategy, I’ve never been in a position where I couldn’t cover both my needs and wants due to impulsive payday decisions.
