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Three Bank Accounts Might Be Better Than One

Is three the magic number? Money magazine is encouraging its readers to find a budget style that sticks, and one of the options is a bank account trifecta. The accounts include two checking and one high-yield savings. Here's the gist of the "bucket budget" way of managing your money, as suggested by Money.

  1. "Figure out how much of every paycheck you want to put toward savings. Have that automatically sent to the savings account."
  2. "Send the rest of your paycheck to checking account No. 1. From this you'll pay monthly fixed expenses, such as mortgage and utilities; set up automatic bill payment online."
  3. "Figure out your monthly surplus in this account after recurring bills, divide by four, and set up a weekly automatic transfer for that amount to checking account No. 2. This is for variable expenses like groceries, entertainment, and eating out."
  4. "Two rules: You can't transfer more money over until the next week, and you can't use credit cards."

Do you think this budget style would work for you?


Join The Conversation
Luckyoneseven Luckyoneseven 7 years
This is great advice if you have a mortgage, but what about for college students who don't make as much, spend frivolously, and don't need an account for your mortgage? Anyone have any tips for girls like me? :)
flyowsley flyowsley 8 years
My boyfriend and I do this too. We both get paid at the beginning of the month so we really have to manage monthly. We have primary checking that is linked to our debit cards for monthly expenses. Another checking for all our bills plus our mortgage. Then another one that used to be our savings, but because we would transfer money from into our checkings so often our bank made us switch it to a checking. Saving money is the one thing we really have a tough time with!
ilanac13 ilanac13 8 years
ok - i think that you lost me about the 3rd account. right now i automatically transfer some money into a savings account from my paycheck so that i don't use it and i start to build up my nest egg. aside from that - i'm just confused about the formula that you're talking about
Smacks83 Smacks83 8 years
The way I would like to have it is like this: 1)High Rate Savings Account: To squirrel away money for the future. 2)Regular Bank Savings: Because it more easily accessible than the high rate one (in case of emergencies) 3) Checking account: Pays for everything that needs to be paid for (already have a budget in place for this). Right now I have the basic saving/checking accounts (with the difference % of each paycheck already put in). Once I get a little more cash I'll open up the High Yield Savings account. Then I will set up various % of paycheck money to allocate within each account.
JoneyStar JoneyStar 8 years
This is kind of how I already set up my accounts. Except no. 1 account is for the mortgage. no. 2 is for utilities, groceries and surplus. no. 3 is for savings. I am working on not using my credit cards and debit. I take what I need out and nothing more. I could stand to hone my transferring skills. Things are very very tight lately since I am out of work. So seeing where the money we have goes and how its used helps a lot. I could stand to save more but its quite difficult these days. We need almost every penny we can get our hands on. Not using credit cards would save tons.
starofsorrow starofsorrow 8 years
It sounds like an interesting idea. I MIGHT consider doing it if I landed a permanent job and get more of a disposable income.
Meike Meike 8 years
My hubby and I already do this. We have 5 accounts between the two of us.
PeachyKeen19 PeachyKeen19 8 years
This is really good advice I was thinking of doing something opening up a checking or savings account at a credit union and keeping my accounts at my bigger bank. I'm going to print this out so I can remember the info...thanks Savvy :)
margokhal margokhal 8 years
Hmm...the first part sounds great, I already put some money toward savings, but I don't see the use of dividing the expendables and bills. I guess it might be because I don't have any yet [but soon!], but all my bills would get paid first thing in the month, so I don't have to worry about what else is in the checking account. But I guess if I can start doing automatic bill pay [some places make it very difficult to use automatic bill payments], then I understand where separating that money out would come in handy. Except it wouldn't work for bills that vary month to month based on usage...that would get kind of complicated. Most of the time you don't know what you've used in utilities UNTIL you get the bill!
pharm_chick pharm_chick 8 years
my hubby has his paycheck split to put part into another account. it is a good idea i think
jessy777 jessy777 8 years
I do this already. I actually have 2 different banks and 5 accounts. I have a high interest account and a free checking at one bank because I get free checks and use it to pay yearly bills & for my debt payment goals. I have a second checking account that my check is deposited into and I pay all monthly bills from it, transfer some to savings and then my secondary checking is for overdraft protection and misc. expenses like car repairs. Some people think my system is complicated but it has worked for me for the last 3 years.
TinaDenali TinaDenali 8 years
This is a great idea! :)
Spectra Spectra 8 years
We sort of already do this. We have one account set up specifically for our mortgage payment and our credit card bill. Then we put the rest of the money into one account for household expenses (most of it is for food, since Aldi doesn't take credit cards) and student loan payments. Every month we transfer a set amount into our savings account as well. It seems to work pretty well for us.
bellaressa bellaressa 8 years
Yeah, I do this already and it's a great idea; however, I have my paycheck already split between my accounts and all my automatic payments. It's a great organizer for me to have my accounts set up this way with automatic payments and automatic withdraws for bills and savings. I just want to set up a fourth account for a down payment fund but not until I have enough I feel comfortable with in my E Fund.
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