debbiebradleySeparate accounts – piggy bank budgeting
This sounded crazy to me… managing money in one bank account is difficult enough, so how would having multiple bank accounts make it any easier?
Well… it does. It may sound/feel counterintuitive, but having your money in separate ‘pots’ means you know exactly what you’ve got and where you stand.
On the advice of my incredible Wealth Strategist, Dominique Mullally (yes, that’s a real job, and a real title, and she’s fucking awesome) I did an evaluation of my bank account… I went extreme, a year’s worth of bank statements with a fine tooth comb (multiple highlighters) to see what categories my money could go into, and I opened a new bank account for every pot.
I ended up with 7 accounts
- Business (this will become 3 accounts)- because business money could ALWAYS be separate from personal money
- Priority Bills – this is for my household/living expenses. The stuff that’ going to cause problems if it’s not paid.a1wzzzww
- Other Bills – For all the non essential stuff I sign up for (think Netflix, Amazon Prime, etc)
- Kids – hobbies/classes/pocket money etc
- Emergency Savings – In case something in the house blows up and needs replacing 😉
- Big Treat Savings – Because I’d like to have a proper holiday one day! This is the ‘fun money’
- I also have a cash back card that I use for online spending/big purchases
All my business money goes directly into the business account, I pay myself a wage into my Bills account, then I have a set amount that transfers into the other accounts each week/month (my savings started at £1 per week, yes, seriously! It doesn’t have to be big to be effective)
Now I can see at a glance exactly how much money I have allocated/remaining to spend, and I don’t have to think about juggling/balancing spending and bills.
Money dates – check in with your bank accounts. Give them some love
Now having 7 accounts is great and makes money more manageable, but that doesn’t mean I just need to set and forget.
At one point in the not too distant past, I was in the terrible habit of checking my bank account multiple times a day. It was a fear-based habit of always making sure I had money left in the bank, that I wasn’t going to be overdrawn, that I hadn’t overspent… I was throttling my money.
Money Dates broke that habit. Money doesn’t disappear unless we spend it, but by checking I hadn’t gone past £0 meant I was always using everything I had in my account… Lack/Scarcity mentality was causing me to subconsciously test the limits of my own bank account, and sabotage any chance of having more than nothing left in the bank at the end of every month.
I had to limit myself from checking my account, that meant deleting the banking app from my phone, and logging out on my desktop (no saved login details for me!) I then slowly went from checking multiple times a day to once a day, then every other day, twice a week, then weekly.
Straight away, I went from spending on a whim (Amazon!) whenever I thought I might need/want or like something, to
By the time I got to my money date I was surprised by how much money I actually had left in the account. It was more than I’d seen in there for months, if not years.
Now I have Money Dates scheduled into my calendar once a week. I celebrate the money I’ve had coming in, I check the money I’ve had going out and make sure I’ve assigned enough to each account for any upcoming expenses.
Celebrate and be grateful for the money you have during these money dates, and use what you have as a benchmark to set exciting goals for the future.
Celebrate wins – put a Percentage away to use for treats
This could be an unexpected windfall, signing a new client, or so many other things where you end up with more money than you expected. It could even be cash back or a discount on something you were expecting to pay full price for.
Celebrate that money, and put it to good use.
All of the money I have is already assigned to one of the categories I have listed above, so unexpected income and other wins, both big and small, are celebrated.
If it’s money I won’t need to pay bills, then the majority of it goes into savings, and 10% is put into a ‘treat’ pot to either spend
This was something I was TERRIBLE at.
Not only did I not celebrate my wins properly, but I also used to spend the extra money frivolously, or give it to someone else.
I have family members who choose to give me cash as a gift for my birthday etc, and for years I would put that money straight into the bank and let it be swallowed by bills, or whatever the kids needed… that’s not a good way to live. It’s no fun, and I never enjoyed the extra money I had. It was always treated as a way to ‘make ends meet’.
Now, the money I have gets separated just the same as my other income. The majority is put into my ‘fun’ savings account, some into my emergency savings as a boost, and some is spent on a ‘here and now’ treat.
When signing a new client, the money goes directly into the business, where some
If I afford a pay increase from the extra work, then I put 10% from the first wage into my treat fund as a celebration of the work I’ve done.
The other ‘win’ is cash back or discounts on items I was willing and had expected to pay full price for. This money can be left in the spending account to put towards something else further down the line, but I like to add it to my savings pots as a little boost. The money gets split 2 ways – 1 part is put into my ‘For fun’ savings, one part into my emergency savings.
It’s so much fun watching the savings accounts grow faster from the additional payments. It’s like paying a ‘bonus’ to yourself for managing your money well.
Give your kids some financial responsibilities
This was a big one for me. As a parent I had convinced myself (with a little help from everyone and everything I’ve ever seen/heard to do with parenting) that it was my responsibility to provide for my kids. Whatever they wanted, and it was up to me to be there and provide for them financially.
As a single Mum, I didn’t want them to go without, and I wanted to make sure they do things they love, no matter the cost.
This came to a head when my eldest declared, in the most dramatic way possible, that I do nothing for her and that it wasn’t fair that she didn’t get as much pocket money as some of her friends. I was declared “The worst Mum EVER!”
Now, this is usually a title I take some pride in because it means I’ve held my ground and stuck by my values as not only a parent but as a person, even if that goes against the wishes/
My kids had no idea of the value of the things they have. No idea the amount of money that goes into them having/doing the things they wanted.
“Well, you can just buy another” was their response when they broke something they ‘loved’ because they couldn’t be bothered to take care of it.
I’ve never taught them financial responsibility.
So at that moment, I devised a new plan for my children that would allow them to learn how to earn and manage their money responsibly.
We sat down and discussed the activities they do, how much I currently spent on those activities. It was something they’ve never given much thought to.
We sat down to talk about all things money.
I asked how much they felt was a ‘fair’ amount of pocket money.
We discussed how much I currently spent on their hobbies and other things they love to do.
How much I give them to spend on gifts for friends and family.
What I do to earn that money in the first place.
After a while I came up with a plan to financially empower my kids.
We agreed on a fixed amount of pocket money each week and a few age-appropriate ‘jobs’ that would allow them to earn more throughout the week.
One rule; They have to manage their own money to pay for their own classes, phone credit, and anything else they want.
This is not an easy thing to do with a regular kids bank account, so I opened a GoHenry account for my kids.
I load cash into my parent account, set a weekly allowance, a list of weekly jobs (to earn extra cash) and let it ride out each month.
They set their savings goals for the year, and each week have a Money Date of their own to see how much they have and how much they need to earn for the following week.
It has been an absolute blast!
My kids love the responsibility.
They feel capable and confident using an ATM, and paying for their own shopping when we’re out.
Occasionally, they insist on treating each other when we’re out because they know they can afford it.
And sometimes, they enjoy a little surprise of extra cash for being awesome kids.
The next steps for me
Despite all the strides I’ve made to overcome my financial struggles, I still have a long way to go.
There are big things I want to do, like clear my remaining debts, buy my dream house and my dream car. Go on a ‘once in a lifetime’ holiday – more than once! And so many other things…
The steps I’ve been taking have been a great starting point for me, but I have goals bigger than my current habits will allow.
I know if I’m to do all the things I want, then I need to get better at earning and managing my money.
I need to start planning and investing in my future (something I should have considered way before my 30s!)
But the habits I listed above have helped me
- Clear a third of the debt I had
- Reduce my meaningless spending
- Feel confident in my abilities to manage the money I have
- Allowed me to have money left over at the end of the month
- Invest in things I thought I couldn’t afford
I will be eternally grateful for the lessons I’ve learned. And I’m proud of the changes they have had on me and my family.
In order to continue the growth that I have, I know I need to step up and step into my purpose and continue to treat money as the positive part of my life that it is.
I need to push myself to reach the income goals I have for my business, if I am to grow it into the business I have in my mind.
I need to push to the next income goal for myself to achieve what I want to for myself and my family.
Continue having money dates, and trust that money is there to serve me in the way I need it to.
Continue growing the amount I put into my savings, and start an investment account for longer lasting results.
I will continue to teach my children about money management, so they grow into financially empowered adults.
Money is there to be earned, spent and played with.
It should be fun and enable us to do great things. Not something terrible to be feared or worried about.
It’s time to change the money story once and for all.
What are you waiting for?
