The 5 Bank Accounts You Need To Stay In Control Of Your Finance
Instead of envelopes, opt for different bank accounts, that's the idea here.
The idea is that your income comes into one central account, and then it spreads out into each of the other “buckets”, or the other accounts based on what its purpose is. You can preset this so that it's automatic transfers. This will help you decipher what money is allocated for booking holidays, or putting food on the table, that sort of thing.
One of the first accounts I recommend you create is a “slush fund”.
Set one up for you, and a separate one for your spouse - It's important that they are separate, not the same. This is for you to spend as you wish with no judgment from the other person, that's your play money. For example, Stevie loves to buy essential oils, and I might want to go and have a pint with a mate, and she might not value alcohol as much as I might.
The next one is entertainment.
From my perspective on this one, this is for stuff you do with you and your spouse, or with your kids as well, as a family. So it's the family day trips where you might all go to the movies, or go out for dinner somewhere, or date night.
The next one here is travel.
Let's say you've got an annual budget - Stevie and I's is about $10,000 a year, so we send $200 a week into a travel account. When that starts to build up, we then go and book a holiday. That's our trigger to say, "hey, there's a few grand in there, let's go and do something with it." So you're actually making sure you take time out and spending some time away from business and normal life and that sort of thing.
Now irregular bills.
This is for stuff like car rego, insurance, rates, or childcare (depending on how often you pay that). But anything that is not weekly, for example: monthly, quarterly, fortnightly, annually. You do want to add all that stuff up and make sure that you've got enough buffer there so that if the council rates and the water bill hit in the same week, you've got some money set aside there.
Lastly, we want to also be putting some money away for wealth creation.
Usually this will be the family offset account if you've got a mortgage, but it's for having money set aside to invest. You might consider investing to be simply paying down debt, which is actually a smart thing to do, right? Or regularly investing into shares, or property, but you want a certain amount a week that's allocated for that.