Monthly Archives: May 2017

Control Your Spending With Using Multiple Bank Accounts

I am always interested in how others manage their personal cash flow, so I’ve decided to share how I do it.
I am always interested in how others manage their personal cash flow, so I’ve decided to share how I do it. Ultimately, which accounts your money flows through matters less than where it flows to, but recently I’ve found utilizing multiple bank accounts actually makes keeping to a budget easier.
I have four bank accounts. Two checking accounts, two savings accounts, plus one credit card. I’ve come a long way from the days I had four credit cards and one bank account (with nothing in it!)
But it’s not that I need four accounts to hold all my cash (though I do wish that were the case). Instead, I find compartmentalizing my money simplifies keeping track of it and, consequently, staying on budget.
See what my bank accounts look like below.
Every two weeks my paychecks are directly deposited into my free checking account at a local credit union. On approximately the same day preset amounts are electronically transferred from my free local checking account to my two savings accounts and my online, high yield checking account.
I then use the debit card linked to my online checking account for all my routine purchases and discretionary spending. This includes gas, groceries, eating out, etc. The beautiful thing is: I only put a set amount in that account every two weeks, so I train myself not to spend more than that.
Throughout the month, I use the remaining funds in my local checking account to pay all of my bills. Most months this is a very predictable amount, though obviously some monthly bills, especially utilities, can fluctuate. I usually budget for a 10% cushion. Above that I could tap into my short term savings.
My two savings accounts are earmarked as short term and long term. My short term account, also at my local credit union, I’ll use if I want to save for a large purchase or a vacation. My online savings account is for either buying a home or graduate school, and also serves as an emergency fund.
Finally, the credit card.
I only recently set up this banking system. Until then, I had been using my credit card for my monthly spending and paying the balance each month in order to get rewards points. (Even I was amazed how long I could go without needing cash). But even with my attention to my finances I found that I was spending more than I wanted each month. Not enough to send me spiraling into more debt, but enough to make me take notice. So my credit card was demoted to a new role in my wallet.
Reimbursable expenses. That’s right. The only thing I pay for with my credit card are travel expenses for work. I’m still earning points without risking racking up a balance of personal expenses. I will probably still use my credit card for personal travel, though this money will be “secured” by funds in my short term savings or spending accounts.

Simple Habits You Must Adopt to Win with Money

It’s no secret that if you’re looking to win with money, you need to make some changes to what you are currently doing. Otherwise, you will remain exactly where you are.

Knowing and doing are two different things, though, and when it comes to change, the doing is hard. It’s difficult to break away from familiar and comfortable behaviors — even if they impact us negatively. Those negative behaviors have become habits, and we all know habits are hard to break.

That’s why adopting new habits and swapping them in for some of your current behaviors is essential if you want to win with money. There are many to consider, but we’ll look at four. These habits can also be referred to as attitudes or characteristics, but I’m calling them habits because they need to be practiced and exercised over and over until demonstrating them becomes routine.

Here are four habits you must adopt to win with money.


I talk a lot about contentment because I think it’s a factor that affects our finances so deeply. Whether or not you practice the habit of contentment determines your outlook of where you are financially and where you are headed next.

When contentment is absent, you can easily make decisions that harm you financially. My own lack of contentment is what led me to pile on over $74,000 of debt. Finding contentment is what allowed me to pay it off and make a life of debt a thing of the past.

Contentment is not to be confused with complacency. I think sometimes, people hear the word contentment and equate it with settling. The opposite is true. Contentment does not mean “just be happy with what you have.” No, it means you can (and should) still work on your goals and aim for where you want to be, but you’re doing that while recognizing, acknowledging, and appreciating what you have and where you are.

Practicing contentment allows you to have a healthy perspective on the state of your finances and life in general.


Contentment and gratitude go hand-in-hand. When you have a real sense of contentment, that naturally leads you to gratitude for where you are financially.

We can easily get caught up in thinking about what we lack and what we want, but practicing the habit of gratitude puts the spotlight back on the many things we have to be grateful for.

No matter where we are financially, there are several things that we each can and shouldcelebrate. Take a moment, daily, to identify a few things you can be grateful for. Adopting this practice will keep gratitude at the forefront of your mind and will cast a healthy perspective on where you are financially.


Our culture struggles with focus. If you have children, you may have witnessed their inability to just watch television anymore. No, they’re watching TV, while playing a game or doing something else on another screen.

We adults are no better. When it comes to our finances, we sometimes want to do everything all at once. We want to save for retirement, buy a house, pay off debt — all the while we have no cash on hand in the event of an emergency.

When we attempt to do too many things financially at the same time, we sabotage our chances of making significant progress in even one of the areas in which we are seeking change. We experience similar results to the person who is trying to lose weight and goes all in by cutting carbs, slashing their caloric intake, and working out seven days a week all at once. They dilute their efforts by trying to do too many things at the same time and quickly give up.

The same will happen to you if you attempt to tackle too many things financially. Set yourself up for success by focusing on one thing at a time before moving on to the next.


I think this may be one of the most challenging habits to practice and develop — but one of the most necessary. As challenging as it is to develop discipline, the good news is that once it’s in place in one area of your life, it will spread to other areas of your life.

Many people who have developed discipline in their finances also experience discipline in their physical health, work life, time management, and other aspects of their lives.

Like all habits, acquiring discipline requires constant practice. And even the “most disciplined” continue to be challenged at times, but once this habit is in place, you will see radical effects on your finances. Being disciplined allows you to say “no” when you need to and “yes” when you can.

Practice Makes Perfect

When contentment, gratitude, focus, and discipline are in place, you will see an amazing transformation in your finances — and in your life.

Adopting these habits requires practice. And not only practice but the daily commitment topractice them. The more you attempt to exercise these habits, the quicker they will become just that — habits. As we said earlier, negative habits are hard to break, but thankfully, so are good ones!

Tips To Save When You Were Born To Spend

Some people are natural-born savers. Others, not so much. Were you born to spend? Saving money won’t come easily, but it’s not impossible. Here’s why.
Are you a Natural Born Spender or Natural Born Saver? Believe it or not, research suggests that—Spender or Saver—you may really be born that way.
So if you want to change your financial habits—say cut back on impulsive purchases and save a bit—what can you do?
A good start is to couple up with your counterpart.
Ever noticed that among couples, one person’s often a Saver and one’s a Spender? It’s a good thing. When two Spenders get together, it’s a recipe for financial trouble. Meanwhile, two married Savers may endure a very secure albeit boring lifetime together.
My parents are an example. My dad’s a Saver, my mom’s a Spender. My wife, Lauren, and I are like this too…and I’m the Spender.
But wait, aren’t I personal finance blogger? Yes, yes. But I’m still a Spender. Despite my dad’s efforts to instill a saving ethic in me, when I got out on my own, I ended up more like my mom: Spender. (Maybe it is in my genes.) Although I learned lessons from overspending, spent years repaying big debts, and now have created systems to pay myself first and invest a percentage of my income, when money comes in, my gut wants to spend it, not save it. I have to fight the urge to spend to put money in the bank. I’m a born Spender.
And though Lauren doesn’t set regular saving goals or always stay on top of things like her retirement savings, she’s a born Saver. When Lauren gets paid, she’s reluctant to spend her money, and usually doesn’t. For example, Lauren could use some new clothes to replace casual outfits she’s had since college. She knows she could use new clothes. We have the money to afford new clothes. I give her time to go shopping for new clothes, offering to watch our daughter on weekends. She’ll go shopping for new clothes. And come back empty handed. She can’t bring herself to spend the money. She’s a born Saver.
So when it comes time to make big financial decisions, Lauren and I balance each other. When I want to hurry up and buy something, she suggests we hold off. When Lauren balks at spending money we have on something that could really improve our life, she’s appreciative that I push us forward.

A big step towards reaching your goals is to understand the subconscious forces driving your financial decisions. We like to think that we’re capable of making entirely rational financial decisions, but this is not the case. If you’re a Spender, you’ll need to create systems in your life that make it impossible for your impulsive self to spend your money. And if you’re a Saver, you need to find ways to create permission for yourself to spend and enjoy your money here and there.
You may already know if you’re a Spender or a Saver. If not, quiz yourself:
When you get a paycheck or another lump sum of money, do you:
Immediately start thinking of things you could buy with that money?
Put some of the money in savings, or simply ignore the fact you now have more money than before.
When you are getting ready to make a large purchase, do you:
Get excited and buy as soon as you can, sometimes too impulsively.
Feel anxious and put off buying as long as you can.
Do you tend to buy things that you don’t really need?
Yes, I have collected a lot of crap I shouldn’t have over the years.
No, I don’t buy something unless it’s absolutely essential.
Obviously, if you answered at least two of these questions “1”, you’re more of a Spender. If you answered two or more “2”, you’re a natural Saver.
When you know this about yourself, you can take steps to consciously overcome your money gut when you need to…even if you’re not married to your financial counterpart.
If you perennially have the urge to splurge, saving can be as hard as shedding belly fat. As soon as you take a few steps forward, one lapse in willpower puts you right back at starting line…or behind it.
Michael Rubin is a financial planner and blogging friend of mine who’s just released his second book, The Savings Solution: A Conversation About Living for Today While Saving for Tomorrow. It addresses this exact problem. For Spenders, it provides a way to incorporate financial planning while still enjoying some money now. For Savers, it takes away some of the guilt that comes with spending money.
The Savings Solution presents 10 savings strategies that closely mirror the advice woven throughout my own blog. I want to highlight four here:
1. Stay emotionally connected to your money.
Emotional connections differentiate Savers and Spenders. (Again, this is not about numbers, it’s about psychology.) Savers are emotionally connected with money. It gives them pleasure to watch it grow and it pains them to part with it. We Spenders are emotionally connected to things money can buy; we get more pleasure out of a new outfit or that new car smell than we feel pain from spending. Rubin’s first saving strategy is learning to develop a healthy level of emotional connection to money. You want to feel pinch of spending money, but not so much you hoard it.
2. Major on the major, minor on the minor.
With some rare exceptions, cups of coffee don’t sink a budget—housing, cars, and other expensive stuff does. You want to take time with major financial decisions like where you live and what you drive. The little stuff matters too, especially small but recurring expenses (like a gym membership you’re not using), but you don’t want to be to pennywise but pound foolish.
3. Spend with comfort on what you value most.
This is what I call spending with intention. Here’s an example:
Michael travels from New England to the University of Michigan, his alma mater, for football games several times a year at a cost of at least $500 a trip. To a non-football fan, that’s a lot of money to spend each year on a very discretionary expense. But Michael loves those trips. They give him something to look forward to. He enjoys every minute of the games—and the trips—because they are intentional.
When you build an indulgence or two that you love into your spending plan, it makes it easier to make other sacrifices (like driving that old car another couple years), because you’re using money in ways that fill your soul and literally add meaning to life.
4. You don’t spend what you don’t see.
Paying yourself first is such a powerful strategy because, as Michael puts it, you don’t spend what you don’t see. If you want to save money, take it out of your paycheck before it even hits your checking account. Then, don’t give yourself easy access to the savings account where you store it (that means no ATM card.) When you automate your finances correctly, you don’t need to budget constantly (also one of Michael’s strategies), letting you worry about money less and enjoy life more.