Our New Money Management System!

I talk a lot about tweaking your budget and always having a good financial plan in place, but like everyone else I, too, can get caught up in life and forget to follow my own advice from time to time ;)  If you recall from one of our last net worth updates, I was pretty upset with myself for turning into “one of those” people too, haha… even IF it was more on the logistical side of things over the actual handling of our money.

But today I’m proud to tell you that I’ve officially DONE something about it! :) I sucked it up and starting pinpointing *where* my main concerns were tied up, and what I needed to do to effectively fix things going forward.  And these were the two major areas of importance:

  1. I needed an *easier* system of tracking all our money and accounts
  2. And I needed a SIMPLER way of doing things too.  Especially now that we have a little boy we’re responsible for and I need the Mrs. to be more in the loop and ready to take over in case, God forbid, something  happened to me :(  The last thing I’d want is for her not have access to anything or get all stressed/freaked out when our financial situation is pretty solid in reality!

So I went through my financial snapshot spreadsheet to see what I could cut and where I could condense, and I found a TON of accounts we could do without and still be perfectly fine.  If not better. Especially now that we’re both more comfortable with our spending habits and how it affects our overall long-term plans.

4 years ago I wouldn’t have even DREAMED of combining our accounts like this cuz we both enjoyed our freedom (we had our “personal” accounts alongside our main “house” ones), but over time we’ve realized we’re both pretty much on the same page anyways, so why complicate things and put even more maintenance in our way? The idea of combining more of our accounts together got less and less scary the more we thought about it, and having a kid pushed us over as we felt more like a “family” now and not so much a “his” and “her” situation.  Even though legally it’s all “ours,” of course. And I still think having separate accounts has its benefits – it’s just not for us any more :)

I jotted down a couple of action items and started getting to work. Here was the new plan:

  • Condense more of our personal accounts, and merge everything into our main “house” accounts (one checking and one savings)
  • Use only ONE main credit card going forward for all purchases – no more “his” and “hers”

And these were the steps we physically took to make it  happen:

  • We closed my personal savings account
  • We closed Mrs. BudgetsAreSexy’s personal savings account
  • We closed my old ING checking account I never use
  • We closed my 2nd business checking account I never use
  • We closed our “emergency fund” money market account we’re no longer going to need anymore (more on that tomorrow)
  • We left $500 only in Mrs. BudgetsAreSexy’s personal checking – for hiding gifts and worst case emergency scenarios
  • We left $500 only in MY personal checking too for the same reasons above
  • We transferred ALL saved money into our main “house” savings account
  • And lastly, we updated all recurring charges from both of our personal credit cards to hit our “House” card only going forward. We’re no longer going to use our own personal cards any more.

9 different tasks, and a LOT of calling up of places to finally get us to a more streamlined place :) And while it’s only been a few days since starting this new plan, I’ve gotta admit I’m feeling pretty good about it all! Less cards in my pockets, and a lot less “things” to think about on a daily basis since everything’s almost totally merged now – I love it.

And I genuinely think seeing more of this stuff more condensed like it is now will surely help me track everything faster and see more of a “bigger picture” since it’s not so scattered all over the place any more. Here’s what our new system now looks like:

  1. We pay everything with one main credit card
  2. We actively manage only two other main accounts: Our house checking and our house savings

That’s it! We still have our investing and other retirement accounts to watch over and all that too, but as far as day-to-day living goes it’ll be a lot easier to manage now that it’s all streamlined. Our original plan had worked for quite some time, but with everything in life you gotta tweak stuff as things change…  And we were def. due for an upgrade. Now we sit back and see how it all plays out! ;) I’ve got no shame in reverting back if needed, but I have a feeling we’re gonna be in a much better position from here on out – I’m pretty excited.

When was the last time YOU took a look at how you manage your accounts? Anyone else due for a nice change up?

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  1. William @ Drop Dead Money August 13, 2012 at 6:17 AM

    Great idea to simplify and condense! If I might make a suggestion, I’d add back one savings account, specifically for cars. Cars are mechanical devices which wear out and need to be replaced. And their replacement number is more than most people can finance out of their regular savings account. Comingling that with the emergency fund or regular savings makes it just that little harder to account for it.

    I’ve found it’s easy to keep track of how much is in there if the account is separate. We’ve usually had an almost new car and a runabout at least a decade old. (We switch all the time – no his or hers. It’s whichever one makes most sense for each trip.)

    Our approach gives us a rough idea of what we want come time to replace, and so we work toward that goal. Having that account separate means we always see where we are, even if we’re not specifically looking. And when we reach the goal, we always have the choice: do we want to upgrade or stop putting money into the account. Now that’s an interesting topic in itself, but left for another post… :)

  2. Lance @ Money Life and More August 13, 2012 at 7:11 AM

    I do have a few different accounts and when my girlfriend and I eventually get married we probably will be combining pretty fast. I don’t mind having a few accounts right now because there isn’t any activity in the other accounts I have open. Eventually I may consolidate but right now there is a purpose for each of my accounts and I’m alright with that. If I ever get bogged down I can consolidate though.

  3. DC @ Young Adult Money August 13, 2012 at 7:19 AM

    I plan on doing the same thing once we buy our house. We don’t want to set up any new credit cards until that is done (for obvious reasons), but it would be nice to have just one credit card. We are down to one checking account, which is nice, but I have to combine both our credit cards into one spreadsheet (plus the checking and cash expenditures) if we want to track how much we spend.

  4. Brian August 13, 2012 at 8:49 AM

    I can see the advantage of this, but we are going to stick with the your’s, mine and ours, for now. We are very much in a, “if it’s not broke, don’t fix it” place. We might change our minds in a few months or years, but we don’t want to close my personal account since it gives us access to really good rates because the requirements to join this credit union are not ones you can fake.

  5. Will - HackingTheBank August 13, 2012 at 9:17 AM

    Everybody needs to clean up their finances every now and then even if they occasionally pick things up. It’s like a house – eventually it is going to need a good deep cleaning. I actually kinda need to do the same, maybe this will inspire me to do so? I think I’m mostly waiting in a holding pattern until next summer after we get married, but maybe I should clean up now, and re-organize then.

    William @ Drop Dead Money, I like your way of managing your car fleet (i.e. sharing based on the trip). Makes complete sense.

  6. K @ Get Worth August 13, 2012 at 9:24 AM

    No wonder it took you awhile to do something about it. That’s a lot of account changes.

    My wife and I have been using a similar system since college. For us, it’s just weird to think of having separate money. It seems easier to save and spend wisely when you’re using family money. Even if the family is only two people right now.

  7. LB August 13, 2012 at 9:31 AM

    I actually tried changing everything to USAA not to long ago, but realized their interest rates suck unless you put ALL of your money into it. Sorry, I am spending my savings for school, so I kept USAA for writing checks, and my old account because of the interest rates. Never changed much so only transfer one time each month to USAA for one payment and the rest is automated in my old account. My hubby and I have always shared an account, except for savings and I thought USAA was going to make life easier, but not with those interest rates. Besides the experience with customer service was horrid. I never got my debit cards until almost 6 months later, with many phone calls and the original guy who helped us, never setup everything we wanted (it was close to closing time, so I supposed he didn’t want to do any more). (Note to J. Sorry I was treated not so hot and had to say bad things about USAA)

  8. Emmy August 13, 2012 at 9:47 AM

    UGH I know I need to clean up my finances. This whole not having a roommate thing has really flipped my finances around more than I thought it would – which makes me realize that if it’s messing me up this much I need to change something. 1) Either get a roommate or move (again… ugh) 2) Really figure out what I need to cut back on 3) Beef up my savings A LOT more than I have been! There are probably more things I need to do – but those are the top 3.

  9. Budget & the Beach August 13, 2012 at 9:49 AM

    I have one old 401k that is just sitting there that I need to roll over. I don’t know why it bothers me so much but it does. I’m rolling into my main investment account with Raymond James. The paperwork is just sitting there….sigh….

  10. Emily @ evolvingPF August 13, 2012 at 10:08 AM

    It took us almost a year after getting married logistically, but about a year ago we finally had a functional joint finances situation in place. However, nearly all our old accounts are still open and not being used! Thanks for the reminder to go ahead and close them since we don’t touch them anyway.

    Congrats on going joint!

  11. J. Money August 13, 2012 at 10:54 AM

    @William @ Drop Dead Money – You know, that’s not a bad idea at all actually. I’ve recommended that to others before, but for me it never works out as well… just adds one more thing to my brain that I don’t want to keep track of ;) I think the “new me” likes just having one main savings pot that I can dip into whenever needed and keep it simple. Def. not good for everyone though…
    @Lance @ Money Life and More – Yup, if it’s working keep on going my friend. It was fine with us for years until we started getting frustrated with the system – so now we change! :) As long long as you just tweak as needed over time you’ll be fine.
    @DC @ Young Adult Money – Haha yeah, I’m not gonna miss that ;)
    @Brian – For sure – I wouldn’t budge either in your place if it’s all working out perfectly well :) We only condsensed cuz it wasn’t working out so sweetly anymore.
    @Will – HackingTheBank – Whatever you think will help clear up your mind! :) I don’t think I’d have the patience to wait an entire year to make the change, but I’m sure you’re about to have a lot of other things on your plate soon w/ the wedding and all, so I could see wanting to wait until later too… although it doesn’t take much effort to change up really ;)
    @K @ Get Worth – For sure :) At the end of the day it IS more of a family-oriented plan there (what you want to use savings for, when you want to retire, what your long term goals are, etc), so I’ve always admired those who have combined early on and stayed with it… I’ve always been a bit slow in life ;)
    @LB – Awww, well I’m both sorry and shocked to hear! Obviously I’m a huge fan of USAA and have 99% of my accounts with them too, but they can’t be for everyone I suppose :) And I’ll agree that their interest rates aren’t that hot either – both with savings and debt. But since they’re also not too horrible, I don’t mind losing a little here and there because the convenience and trust is much more worth it to me in the long run. If things ever got TOO out of control I’d ofcourse consider switching, but I don’t see that happening anytime soon ;)
    @Emmy – YES! A change is in the air for sure! Sorry it has to be under bad circumstances there, but I agree with your options there – gotta do something about it before it consumes you! Both financially AND emotionally :) But we got your back!!! You know you can always email or call me whenever you want! You can doooo iiiiiiiiiiiiiiiiiittt!!! :)
    @Budget & the Beach – Ack! Your mission is to knock it out today!! DO IT! DO IT! Your life will be sexier! :) It would bother me too! And also – randomly – I’m budgeting at the beach myself this week, haha… we need to change blog names for the time being ;)
    @Emily @ evolvingPF – YES! Close ’em out and be clear and free again – it’ll feel so good!! :)

  12. Money After Graduation August 13, 2012 at 11:11 AM

    Great idea to simplify, now you will have so many less statements to weed through and bog you down. I myself only have one account currently, so I am looking into opening up a TFSA to give myself a bit of interest on my savings. My partner and I aren’t at a place right now where we will combine accounts, but I’m sure one day we will get there.

  13. My Money Design August 13, 2012 at 11:52 AM

    I’m all for keeping this simple! A few years back, like you, I had separate accounts each with different purposes for the money. But then it became more of a chore to monitor them all than the benefit it created. So I condensed them all into a handful of places and kept a Master List that told what allocation of the total pie went to where. It was much much easier to work with and gave me time to focus on more important things!

  14. Donnie Lawson August 13, 2012 at 3:30 PM

    There is something satisfying about closing accounts and simplifying your financial life. I’d love to get rid of my wallet and just cary a money clip with the essentials!

  15. misterstress August 13, 2012 at 4:18 PM

    J, I constantly look at my accounts in an attempt to streamline.

    We have the:

    Home repair
    Credit Card payment
    Car saving
    2 separate checking (slush funds/personal money)
    1 joint

    Streamlining and condensing accounts would be great, but I like setting goals and having money ear marked for the next purchase!

  16. SavvyFinancialLatina August 13, 2012 at 4:45 PM

    I tried opening up an account with ING, just to realize that’s its too much trouble keeping up with the accounts. I need to close it :/
    I need to keep my finances as simple as possible!

  17. Call Me What You Want Even Cheap August 13, 2012 at 6:55 PM

    You’re reminding me of what I am going to have to do in a few weeks. I am getting married next weekend and we were just talking about which accounts we’re going to close to bring it all together. I have a line of credit that I haven’t used since 2009. I am surprised it’s still open. I’ll be closing that account in a couple of weeks.

  18. Jacob @ iheartbudgets August 13, 2012 at 6:57 PM

    Nice work! Sometimes it gets a bit too complicated and definitely doesn’t need to be. And I’m the KING of complicated budgeting! But I have found that streamlining can help put my wife and ease, and since she handles most of the spending, this actually helps us stick our budget better.

    We’ve been combined since we got married because it was easier that way, and it’s worked great for us ever since. The one thing I need to work on now is getting her more involved in case I can’t do it for some reason (like death).

  19. Kelsey August 13, 2012 at 8:57 PM

    Now! My fiancé and I are buying a condo together and I’ve realized that trying to maintain 4 checking accounts and 2 savings accounts is a lot of work.. And a lot of transferring to follow. I manage all of the money together, and we’re getting married. It’s just a lot simpler to just manage our money together now that virtually all of our expenses are managed together as well. Once we close on our condo, I’m going on an account closing spree and shutting down every account that is no longer used or doesn’t provide some sort of financial or convenient benefit.

  20. Edward Antrobus August 13, 2012 at 10:14 PM

    A couple years back, I set up a personal checking account to pay my debts. One of the companies isn’t very consistent on what day they take out their pound of flesh and it was driving my wife crazy. That was pretty much the only big shakeup we’ve had since combining finances when we first got married.

  21. LB August 14, 2012 at 9:09 AM

    J. I feel bad, but USAA is a dead account to me. I haven’t switch house insurance or anything else over, because I don’t see the point after all the hassle. I use it to pay one bill and transferred my 401k into an IRA account and that is it. Maybe if I let it lie and concentrate on school I will forget their bad and start looking for the good. It’s really hard to do when they couldn’t even get me my debit cards!

  22. J. Money August 14, 2012 at 10:17 AM

    @Money After Graduation – Wow, one account is pretty minimal! Not sure I’m ready for that yet, but I admire you for it :)

    A TFSA would be a great addition as well.
    @My Money Design – Yup! Exactly what we’re going for here – glad you figured out how to do it smoothly too :)
    @Donnie Lawson – THAT’S WHAT I DO!!! I use a money clip and it’s one of the best things I’ve started doing :) 7 years now and going strong, haha… you can fit a lot in them too, here’s what’s in mine: Budgetsaresexy.com/2011/07/whats-in-your-wallet-purs/
    @misterstress – Hey, whatever works! If you’re rockin’ it like that and things are going smoothly, keep running with it :)
    @SavvyFinancialLatina – Haha, I did the same thing. ING is great for a lot of things, but only if you put in the time to use it :) I eventually had to close mine out cuz it was just lingering…
    @Call Me What You Want Even Cheap – Perfect! Lots of fun changes your way, congrats :)
    @Jacob @ iheartbudgets – Yup, great idea. That was at the top of our list too with all this condensing and streamlining – making sure the wife had access to 100% of it just in case. And now tha she does it’s another small weight lifted off my shoulders :) I highly recommend it!
    @Kelsey – YAY!!!! FUN!!!! OMG you’re gonna feel a ton better when it’s done too, I’m excited for you :) Nerds unite!
    @Edward Antrobus – Haha… well there always has to be *something* ;)
    @LB – Hey, I don’t blame you! If I had equal experiences with them I’d dip out too. No point in giving a company business that you’re not confident in! Even IF it’s USAA :) They’re certainly not perfect.

  23. Jen @ Master the Art of Saving August 14, 2012 at 5:08 PM

    I’ve been planning to do a big overhaul and evaluation, but kept putting it off. Maybe I’ll finally get around to it a couple of months after we get into our first house. I know things are going to be crazy for a while, but they should settle down soon.

    Great job getting $hit done, I’m sure you feel loads better. :-)

  24. J. Money August 15, 2012 at 10:19 AM

    Thanks girl – it’s def. been worth it so far :) My brain feels lighter already!

  25. Smart Money Manager September 2, 2012 at 10:32 AM

    It must a been a tough job but you pulled it off . Congrats!

    Might try some of these steps too…

  26. J. Money September 3, 2012 at 8:17 AM

    Thanks, you totally should – my brain has been so much clearer the past few weeks :)