Why I Have 14 Bank Accounts

Do you want to know how to organize your bank accounts? Do you want to manage your money better? Today I’m sharing why I have 14 bank accounts to help you get started today.

I spoke at a financial workshop at my church and I mentioned I had 14 bank accounts. Afterwards I was asked a lot about this method and how it works for me. There were 3 reactions – interest, shock, and confusion. Everybody wanted to know why I have 14 bank accounts.

Managing money this way has simplified my life. Having multiple bank accounts has helped me get out of debt, stick to my budget and stop living check to check. Before using this technique, I found it extremely difficult to stay organized and keep track of everything in one bank account.

Having several bank accounts may seem strange or overly complicated, but it is not difficult at all. Since I started using this method, keeping track of money is very easy for me. It’s easier to track my spending. Plus, I’ve been able to save more money using this strategy.

Here’s a breakdown of the various bank accounts I use to help me stay organized & manage money better:

1. Main checking account

This is where all my direct deposits go into. Period. There are no bills paid out this account. So, my income is directed here and then transferred to one of my other bank accounts. I used to have automated monthly bills come from this account but that did not work for me. So, no bills get paid from this account.

2. Rent account

Twice a month I transfer half my total housing payment here. I started this practice back in the dark days, when I was $60,000 in debt and chronically disorganized. The benefit is fantastic, and I wish I always did this. Here’s why: I was able to stop worrying about being short, being late, and being concerned about any overdrafts. Each month there are only 3 transactions. Two transfers from my main account and one check to the landlord.

The method can work for your mortgage

3. Non-monthly bills account

This is where I deposit money each month for my bills that are paid quarterly, semiannually, and annually. This started because I was tired of stressing out trying to come up with hundreds of dollars to pay my car insurance.

Initially I called the company to see if I could switch the payments to monthly, but I would end up paying so much more. So, I decided to simply break up the payments. All I do is divide the bill by 6 and make those monthly payments to this account so when the bill came due, I would have the funds.

4. Vacation

I put money here to plan for my long term and short-term trips. This helps me avoid credit card debt because I plan the payments in advance for where I’m going and set aside money as necessary to this account.

5. Car repairs & maintenance

When you have a car, anything can happen. You may need a new battery, to change your tires or get in a major accident with a high deductible, because the insurance company doesn’t always pay for the damages in full. This is where this account comes into play for me.

6. Car fund

Yes, I have another car account, but it serves another purpose. It will help me save for a vehicle. I never want to take out a loan for a car ever again. To make this happen I believe in self-financing cars. Rather than pay a bank a car note, I make the “payment” to myself and place it into a savings account. Allowing me to have the cash to purchase another vehicle if and when I need to do so.

7. Emergency fund

Well, life happens. People get sick, laid off, divorced, things break. While we can’t stop all of lives unfortunate events… Having a cushion between you and life makes all the difference. Since emergency situations will happen, having funds set aside will help turn emergencies into inconveniences.

My emergency fund significantly reduces financial stress along with the burden and frenzy of having to find the money to handle life’s twist and turns.

For more info and tips on saving for a rainy day check out this post I put together on Emergency Funds.

8. Christmas savings

Though I love Christmas and don’t get caught up in the excessive consumerism of the holiday season, I do enjoy giving gifts. So, my wallet doesn’t end up with a debt holiday hangover I plan for gift giving in advance.

Some banks offer Christmas club or holiday savings accounts to help with this. But I do it myself by simply, making a list of how many people I will give gifts to then allocating an amount to avoid overspending. This method helps me stay organized. For more tips on how to have a debt free Christmas check out this blog post.

9. All the school stuff bank account

I don’t like having to find money to pay for the many school “whatevers”, so I prepare in advance. There will be numerous events like picture day, trips, book fairs, bake sales, additional school supplies, etc. I look at the previous year to get an estimate and save money each month throughout the year for these things. I know what her tuition and after-school fees will be, and they all go into this account.

10. Child savings account

My daughter has a savings account. Any money that she may receive for birthday’s, Christmas, and money she earns doing jobs around the house (I do not pay her for chores) is put into her own separate account with her name on it. Side note: when she earns money she allocates it and then we make bank runs when needed.

11. My fun fund

Each month, I budget “fun money” for myself. Yes I do. It’s necessary, but only AFTER taking care of all of my household bills and budget items. I love this! I get to do whatever I want with this budgeted amount, without having to worry about blowing the budget. It’s the guilt free, splurge on me, treat your self money.

12. Opportunity fund

I use this bank account to help build my retirement fund or store extra cash that I made for other opportunities. For example, I may sell a planner I no longer use or a gently used designer piece from a thrift store, and then turn around and sell it online to make extra money. The extra money that I make is then used to either build my retirement funds or to put more money toward another long term goal. When I had a bunch of debt in debt, I would use funds from this account to help us pay it down faster.

14. Jesus account

This account is very special to me. I’m so thankful to God for everything we have. So, I wanted to have a checking account dedicated solely to giving at our church. At the very least 10% of our gross income is placed in here.

When I was in the really struggling financially it took some serious discipline to not look at money just sitting in my account. Although, I never spent this money, I didn’t like the mental battles I was having. Like oh, I’ll spend this little bit and put it back later.

This separate account was very helpful back then to eliminate the temptation of not giving because its was – separate. Thankfully, the conflict faded somewhere along my debt free, organize my money and life journey. I either write a check or give electronically from this account.