I have three. There’s the family account, where my husband’s paycheck is deposited. From this account, we pay the bills and keep the family afloat. Then there’s my business account, which is hooked to my PayPal account, and this is where all my business checks are deposited. We use this money to pay extra on our bills, and often, when unexpected things come up, like the growth spurt my son’s feet decided to have last week and we needed to buy him new shoes. And then we have a savings account for the kids.
Why three bank accounts? What benefits have come our way by doing this?
First, having a savings account is just a smart thing to do. The old days of shoving your money in the mattress are long gone. Who wants to sleep on their money—but more than that, it’s not safe. You can get robbed, or have to flee your house in case of emergency.
As far as the other two accounts go, I tried depositing my earnings into the family account, and we discovered something. The money was disappearing into the endless abyss, and we couldn’t tell where it was going. We tried tracking it on paper, but that didn’t work for us. All we knew was that I was working, and I was getting paid, but we weren’t sure what happened after that.
When I started putting my earnings in a separate account, it all became more clear. I could see exactly where my money was being spent, and it gave us more control in saying, “Let’s use this paycheck to get ahead on our car payment this month.”
When you have a bank account that gets constant traffic, like our family account, it’s so easy for things to fall through the cracks. For instance, let’s say my husband gets gas and a snack on his way to work. That’s two transactions. Then he deposits a check, and then I run to the store. That’s two more transactions. Then he buys lunch, and I pay a library fine, and then I deposit a check. There’s stuff coming and going all the time in that account, and it’s a crazy mess. I mean, you could lose a small child in there. But by separating out the money, we cut the traffic in half, and we can watch it more diligently.
This isn’t to say that we keep money from each other. Far from it. The other day, my husband needed to go clothes shopping, so we went together and I used my account to pay for it. We don’t have a “your money” and “my money” mentality. We’ve just found that by doing it this way, our accounting has become so much easier, and we can see where we spent the money and what money we have left. It reduces the chaos by a huge amount. It also makes it easier for business tax purposes, putting things all in the same place.
So, if you’re having a hard time tracking your money and you’ve got it coming in from multiple sources, you might consider opening an additional account. I’m not saying it’s the answer for everyone, but it has worked for us.
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