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Sunday, November 13, 2011

Two Checking Accounts?

If both you and your signot (significant other) are taking dips out of the same account, how do you know if you're staying within your budget? What if he spends the money that was earmarked for the car payment??!!

We all know it's easy to become stressed about money and figuring out the best way to manage it can be a challenge. What's even harder? When you are co-mingling your finances with someone else. Chances are that one of you spends a bit more than the other- whether its on clothes, or on groceries; but what if the roles reverse one day, does the other person know the limit?

My last post talked about those of us that have a difficult time with budgets and being consistent about tracking our cash. Once you figure out your variable expenses (anything NOT fixed like food, going out, clothes, etc.) you can either take that money out in cash OR just open a second checking account!

When you open a new account, number one, you won't have to worry about losing your cash and two, you can see your spending patterns without having to collect receipts.  With both of these methods, you will know when your spending has to stop (when the money is gone) and you won't have to worry about dipping into money that is intended for a fixed expense, like say your electricity.. or worse, your mortgage.

So figure out how much variable cash you have after your bills are paid, work it out so that money goes directly to your new checking account* (set up direct-deposit in equal amounts from each paycheck). Everything else goes into your primary account and will cover your fixed bills.

Make sure that the fixed bills are being paid when there is cash in that account however, so call any lenders, retailers, or organizations that you are paying and change dates as necessary.

*Make sure you know the details of the checking account you are opening. An increasing banks and even some credit unions are instituting fees to maintain a checking account; some will waive the fees if you have a certain amount being directly deposited- so read the fine print!

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