Author Topic: How do you have your bank accounts set up?  (Read 8180 times)

Landor n Stella

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How do you have your bank accounts set up?
« on: March 14, 2012, 07:46:51 PM »
I'm curious how other people have their bank accounts set up, and if having your accounts in a certain way contributes to successful Mustachianism? We are looking into having a restricted amount of money easily available in one account as a way to keep us on track and disciplined about spending habits. Someone in a thread (that of course I can't find now) mentioned having two checking accounts, one to receive all income and pay the 'fixed costs' each month, and another for all the costs that fluctuate a bit.

We also do a bit of consulting as a second/third income, but it requires travel. So part of what we want to do with our accounts is separate the consulting costs and income from our everyday costs and income. Partially because it's easier to track that way and partly to make sure we are coming out ahead on the consulting.

Share how you organize your checking/savings accounts- need ideas! :-)

~Stella

sol

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Re: How do you have your bank accounts set up?
« Reply #1 on: March 14, 2012, 08:39:13 PM »
We have four checking accounts.

1 and 2 are the original accounts that my wife and I had before we got married.  These receive the direct deposits of our paychecks.

3 is the family expenses account, to which regular transfers are made on payday, and from which the mortgage and all of our family bills are paid. 

4 is for everything related to the rental property.  It just makes taxes easier to have it all separate.

Basically #3 absorbs all of our biweekly volatility, while 1 and 2 have large fixed transfers that result in a small positive balance of personal spending money.

Somnambulist

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Re: How do you have your bank accounts set up?
« Reply #2 on: March 14, 2012, 11:01:08 PM »
My wife and I have two accounts, a joint checking and a joint savings account.

We pay all of the bills except the HOA and Car payment out of the checking each payday and transfer any left over to the savings account we keep our emergency fund in and also have our HOA/car payment drafted from.

It makes it somewhat difficult to get at our emergency fund money so we don't use it unless we need it.

herisff

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Re: How do you have your bank accounts set up?
« Reply #3 on: March 15, 2012, 07:09:36 AM »
I used to have 2 checking accounts & 2 savings accounts. The 2 checking accounts were as you described above (one for everyday, one for bi-annual or annual bills). The 2 savings accounts were the e fund and the car account. Because I've switched to YNAB and can keep an eye on the savings amounts in there, I have 1 checking account for everything, and a combined savings account for the e fund and car account. It's working very well for me to have less to keep track of.

Physics

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Re: How do you have your bank accounts set up?
« Reply #4 on: March 15, 2012, 07:18:16 AM »
I've been all about consolidation and simplification.

We have one bank account, with savings and checking, no fees for anything.  We pay ALL of our bills via the online bill pay with the checking account.  It took me a little while to trust this process, but it has been reliably working for 2 years now with no failures.

We have our 401ks with our respective employer choices that we really have no control over, they will eventually get rolled over when we switch jobs or retire.

Then we have the VAULT, where everything ends up eventually, with Vanguard.  Our Vanguard account contains our Rollover IRAs, our Roth IRAs, our brokerage account, and general taxable investment account.  All accounts sync (usually quite successfully) with Mint.com.

That is it, simple as it can be, I think.
« Last Edit: March 15, 2012, 07:31:57 AM by Physics »

MEJG

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Re: How do you have your bank accounts set up?
« Reply #5 on: March 15, 2012, 07:47:36 AM »
We have a few accounts.  More than I would ideally like.

Active accounts:
1) Deposit checking - all checks are direct deposit into here, and physical checks are sent to this one, and student loans paid out of this account
2) Savings- highest interest we could feasibly find and at the same bank as checking accounts.  This holds our Efund and is basically a sinking fund too (not separate at this time, we're early in our journey)
3) Spending checking - all monthly expenses paid out of here.  Mostly on our 2 credit cards. 

At the end of the month the needed amount is transfered to the spending checking from the savings.  I've been paying chunks weekly into my student loans out of the deposit checking, and transfered a chunk into savings for next month/ getting efund to where we want it.

Passive accounts:
1) my old bank $100 in a savings account to keep my account open
2) Mr. MEJG's old banks has a $250 CD
3) Vanguard Roth IRA - haven't been able to contribute for about 3 years, hope to be able to this year

zinnie

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Re: How do you have your bank accounts set up?
« Reply #6 on: March 15, 2012, 08:28:40 AM »
This works for us: all money enters through one checking account. It then gets withdrawn into all of the other accounts every month automatically, usually right after the paychecks get deposited (right now--car fund, Roth IRAs, Taxable accounts.)

We also have a max amount that we don't let the checking account get above, usually about 5 grand. Whenever it goes above that (easy when you live the mustachian lifestyle) the excess goes into investments. My theory with cash is that when it is sitting in checking it is in danger of being spent, so I try to keep as little in there as possible. This also leads to higher rates of investing than we even planned by adding above and beyond our planned savings amount every month.

Mike Key

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Re: How do you have your bank accounts set up?
« Reply #7 on: March 15, 2012, 08:51:08 AM »
We have a joint checking/savings with a credit union, then we have a high yield investor checking w/ brokerage account with Charles Schwab and I have a business account with BB&T.

My wife's paycheck is drafted to our joint, but before it gets there 15% is automatically always deposited into our savings.

With my business, I save 30% of every paycheck 15% bus. savings 15% our personal savings.


chrissyo

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Re: How do you have your bank accounts set up?
« Reply #8 on: March 15, 2012, 08:57:03 AM »
Excluding the messiness of accounts open just to make international transfers/spending easy, we have 2 checking accounts.

1. Salaries paid into the account, and all bills (including credit card) paid out of the account. Transfers out to savings/investment accounts after the salary hits. Salary comes in around the 25th, and all bills go out on the 1st. After everything is paid, we leave 100 in the acct for any bills that are automatically deducted on other days of the month/just in case we forgot about anything.

2. Cash withdrawal account. Again, we typically start the month with 100 in here. If it's a cash light account, the top up at the start of the next month is small. If it's a cash heavy month, we go into our overdraft, which is capped at 500, but we pay no interest on the 250. If we are withdrawaling a *lot* of cash and approaching the 250 free overdraft limit, we'll do a mid-month transfer to flatten out the account. Really, we could leave this acct at 0 at month end, because we rarely use the whole 250 overdraft, let alone another 100, but I just like having a small amount of actual cash there.

We don't actively use either account much. Last month, I think we took 20 out of the cash acct? Primarily, we spend on a cash back credit card, and just pay it off each month, meaning our only activity is a manual transfer or two at the start of the month to level things back at 100.

Our savings accounts are a little more elaborate in order to take maximum advantage of various high interest and/or tax sheltered savings offers, but again, most things are automatic, and we just have one "short term savings" account things actively flow into and out of for holidays, home repairs, etc.

K

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Re: How do you have your bank accounts set up?
« Reply #9 on: March 15, 2012, 09:48:07 AM »
1 and 2 are the original accounts that my wife and I had before we got married.  These receive the direct deposits of our paychecks.

3 is the family expenses account, to which regular transfers are made on payday, and from which the mortgage and all of our family bills are paid. 

Basically #3 absorbs all of our biweekly volatility, while 1 and 2 have large fixed transfers that result in a small positive balance of personal spending money.

We currently do it like this, but add 3 savings accounts (2 personal, 1 joint). It gets confusing, but my wife is a CPA ;-)

We are talking about dropping the personal savings accounts and move the direct deposits to the family checking account, with allowances paid into the individual personal checking accounts and our 'emergency' and short term funds would live in joint savings.

April

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Re: How do you have your bank accounts set up?
« Reply #10 on: March 15, 2012, 02:55:39 PM »
I detest the idea of letting cash sit there earning nothing, but I am too risk averse to invest more than the 25% I already contribute to my 401K at this point.  My solution is High Interest Checking/Rewards Checking. I currently have 3 seporate accounts that all earn over 2% interest as long as a certain # of transactions are done each cycle. I have 3 because they all have caps, 10K per account, etc. It is a bit of a pain to keep track of the transactions and all the seporate debit cards but so far it has been worth it to keep the money 100% liquid and also earn a decent interest rate. One of the accounts I have my check direct depositted into, the other's pretty much maintain themselves i.e. the interest paid covers the $ of the required transactions pretty close to even so i rarely have to worry about transfers into it. The one I have my check DD into is also the one I pay bills out of. It works for me.

AJ

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Re: How do you have your bank accounts set up?
« Reply #11 on: March 15, 2012, 03:57:38 PM »
I currently have 3 seporate accounts that all earn over 2% interest as long as a certain # of transactions are done each cycle. I have 3 because they all have caps, 10K per account, etc.

Oh my god, I can't imagine! I'm glad that works for you, don't get me wrong, but that sounds like a nightmare to me. The rewards checking account I've seen all required 10+ debits a month. To have three would mean I would have to buy something with a debit card every single day...yikes!

MacGyverIt

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Re: How do you have your bank accounts set up?
« Reply #12 on: March 15, 2012, 05:50:27 PM »
Check out your local credit union. Banking fees SUCK.

I've been with the same credit union for decades and it blows my mind how much regular banks charge or require as cash-in-account-to-avoid-fees ($500 balance required for no fees?!? WTF?? I'm looking at *you* SunTrust!) for the privileges of allowing them to play around with your hard earned income. I've saved untold charges and fees by banking with a credit union and there are likely credit unions available to you in your local area for far less than any bank requires cost-wise. There's been something of a well-deserved banking revolt recently given the Ma-Bell like behavior of some of these companies: http://video.cnbc.com/gallery/?video=3000051607 <-- Seriously, check this out. Vote with your dollars!

I have never, ever paid for having a checking, savings or money market account with my credit union. The most they require is a whopping $5 in my savings account. That's it.

Also, my credit union offers an automatic bill pay option. They will issue checks from your account either one at a time or on a scheduled basis. I used to have a number of bills charge to a CC but embracing Mustacianism (<--- I hate that I cannot spell check this... grr) I've gone off of credit cards entirely and have my internet/electric/mortgage/HoA fees automatically issued via this mechanism. If your due date varies you can always send an additional check which will function as a fail safe/overage on your internet/electric/other account just in case you're concerned about being a single day late.

Thus far, it's worked like a total charm for me. Bill payments are automated, I don't have to think about it for one second -- I love the simplicity, let the automation do the work for me. And the big bonus, when I call my credit union, an actual flesh and blood real, live human being answers the phone.

And a note about ATM fees - don't pay them!! Your local grocery store, pharmacy or home improvement store will provide to you cash back on your debit card (with a purchase, obviously) at no additional cost.
« Last Edit: March 15, 2012, 06:01:12 PM by MacGyverIt »

Balance

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Re: How do you have your bank accounts set up?
« Reply #13 on: March 15, 2012, 11:19:44 PM »
We both have our own separate checking accounts where our checks get direct deposited into.
We also have a joint credit uniion high yield account (currently 2.25% up to $25k) which we use to pay all our monthly bills.
We plan on opening a 4th for our rental property we plan on buying in the next few months.

Landor n Stella

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Re: How do you have your bank accounts set up?
« Reply #14 on: March 16, 2012, 06:49:18 PM »
Thanks for all the ideas! I think we have settled on something that looks like this: close accounts and consolidate to a credit union, have one checking account for auto-bill pay and stashing extra payments for student loans, another with debit cards for gas and groceries. The savings account will be for our efund. We'll use our existing credit card to pay for consulting-related expenses, and pay it off every month with the income from consulting. That will allow us to track things separately without having an excess of accounts.

So, my next questions is: does anyone know if closing a bank account hurts your credit score? What if you close 5 in a short period of time?

Will

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Re: How do you have your bank accounts set up?
« Reply #15 on: May 23, 2012, 11:43:50 PM »
So, my next questions is: does anyone know if closing a bank account hurts your credit score? What if you close 5 in a short period of time?

It shouldn't, as credit scores are tied to credit.  Your bank account is not a part of credit; it is checking and/or savings, and has no effect.  Maybe if you had a loan, but that isn't directly tied to your bank account.  You can go check things out on a credit score simulator at creditkarma.com for free (I just checked, and there is nothing there about bank accounts).

butterandjelly213

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Re: How do you have your bank accounts set up?
« Reply #16 on: May 24, 2012, 08:02:58 AM »
I have one checking account.  Paychecks go in, I pay all bills out of it, and any money left over is "fun" money.  I've done this since I turned 18 and got my first checking account.

I recently went through a change with my approach to savings accounts and am waiting to see how I like it.  I used to have my cash split into several targeted accounts - irregular bills, vacations, emergency fund, etc.  At one point, I think I had something like eight savings accounts.  Earlier this year, I started to consolidate and put most of my cash into a brokerage account because theoretically, I'll earn more interest that way.  Now I have the brokerage, a small savings account tied to checking (for easy access) and a few thousand with an online bank for irregular expenses.  So far, I like that it's easier to keep track of.  Time will tell if it works longer term.

jimmygibbon

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Re: How do you have your bank accounts set up?
« Reply #17 on: May 24, 2012, 08:55:53 AM »
I currently have my checking and savings through my local credit union with whom I have banked since the 80's.  Unfortunately, the interest rate is only .0015%.  I recently opened an ING savings account and checking account (used the MMM link here and received the 50.00 bonus).  The ING savings account earns .0080%.  I noted some people in this thread getting savings rates above 2%.  Was wondering if anyone would be willing to share where to find these rates.

Jimmy

igthebold

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Re: How do you have your bank accounts set up?
« Reply #18 on: May 24, 2012, 09:13:40 AM »
My wife and I are currently consolidating everything to ING Direct: 1 checking, 1 savings. Much simpler.

I also have a checking account that was required to open the HELOC I have, but I don't even consider that.

trammatic

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Re: How do you have your bank accounts set up?
« Reply #19 on: May 24, 2012, 09:15:14 AM »
We have online checking and savings accounts, and another savings account with a local credit union.  ACH makes moving money between them easy, and the credit union works well when I need an ATM withdrawl or to deposit checks.