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How I Use Bank Accounts To Organize Our Finances

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bank accounts to organize finances

I recently went out on my own and started a financial consulting and bookkeeping practice. As the primary (and sometimes only) breadwinner for my family, this has thrown a bit of a wrench in our personal finances. Not only am I not getting a regular paycheck every two weeks, but I lost my employer-subsidized insurance and a 401k match.

Getting Financially Organized

I’ve spent the past few months researching our options for health insurance and identifying the best options for our retirement savings. I’ve also set up a process to make sure I save the appropriate amount for federal and state income tax because I don’t have an employer withdrawing it from my paycheck for me.

These changes were all things I was expecting. What I hadn’t realized the importance of was organizing our cash so it wasn’t all sitting in one big pile. To solve this, I set up multiple bank accounts to organize finances.

Given that my self-employment income is variable, and that my largest client pays me once a month, having separate bank accounts to disseminate my cash to is critical. If I keep it all in one account, including my tax estimate, I will be tempted to spend it. I know myself too well.

I’ve re-organized the flow of our family’s cash into five bank accounts. Each account has a designated purpose that allows us to optimally manage our money. The five bank accounts we now have are a family checking account, an emergency savings account, a family savings account, a medical expense savings account, and a flash cash account.  Separately, I have a business checking account and a tax account.

Family Checking Account

This is the primary bank account. All money comes and goes through this account. I transfer cash from my business checking account once a month to the family checking account. My husband’s paychecks are also deposited here. All bill payments are drafted from this account. Money is transferred to our other bank accounts from here, all via automatic draft.

Emergency Savings Account

We have an emergency fund in place to cover unplanned events such as home or car repairs, but mostly I’m always worried about an emergency trip to the veterinarian. We have a mischievous Great Dane, along with a few other critters. I don’t want to find myself in a position of saying no to a life-saving surgery because we don’t have the funds.

Family Savings Account

I funnel funds for everything we want to do that requires some savings over time. Things such as the next family vacation to Walt Disney World or Myrtle Beach, season passes to the museum or a new SUV.

It’s also our rainy day account.

Health Savings Account

While not a traditional bank account, we set up a health savings account.  A Health Savings Account (HSA) is an account specifically for health-related expenses. It’s tax-free and typically has a debit card assigned directly for payments from the account. The benefits of an HSA include the contributions and any earnings are tax-free and it can be rolled over into the next year.

Monthly, we are transferring cash to the HSA to cover future medical expenses.

Flash Cash Account

Otherwise known as a slush fund or fun fund. All our money left over after bills goes here. This money is used for date night, my Chai Tea Latte addiction, and money for all the fun things.

Sadly, it’s also used for not so fun things like the toilet seat cover we bought last night.

P.s I just heard about this great new fintech app called Astra.finance.  Basically Astra is a smartphone app that lets you automatically move around between your accounts.  This kind of thing is great if you have a steady income.  You can pretty much set up some rules and forget about moving your money.  It works for both checking and savings accounts.

Does your family use multiple bank accounts to organize finances? Let us know in the comments below.

Read more:

Five Ways Your Bank Can Help You Save for College

Child Savings – More Than Money in the Bank

Why We’re Opening a Bank Account For Our 3-Year-Old

A Financial Guide To Childcare

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Financial Guide To Childcare

The costs of childcare depend on several factors including where you live, the types of childcare services you need, and the number of hours you require childcare services. With the right amount of planning, the costs of these services can be significantly reduced.

High Costs of Childcare

According to the National Association of Child Care Resource & Referral Agencies (NACCRRA) the cost of center-based daycare in the US sits in the range of $3,582 to $18,773 per year. The average cost of such services is $11,666 per year. An au pair costs between $4,320 and $19,800 per year. The average cost of an au pair is around $18,500 per year.

Planning Ahead for Childcare

You can find the right au pair in the USA, using online resources. This way, you are better able to understand the different types of options you may have available to you. With a greater variety of options, you have a better chance of choosing a childcare service that is suitable for you financially.

The food needs of an au pair will need to be considered when budgeting. They will require food that meets their dietary requirements. Households must ensure that they do not spend money on food that does not get eaten. In order to avoid wasting money on food, it is advisable to merge the eating habits of an au pair with that of the family.

Managing Finances

A contingency fund helps when unexpected expenses arise. You can transfer a fixed amount of money to your fund. A provision for 50 percent of additional expenses should be made before the birth of a child.

A budget needs to set to guide the financial decisions in relation to childcare. Costs of childcare can increase significantly over time. A budget helps to prepare a household for both expected and unexpected childcare costs. With a budget, you can have a better idea of the options you have.

It helps to reduce your debts in order to reduce the pressure on childcare expenses. With a documented plan to reduce debt, one can more easily afford childcare services. One of the best ways to reduce debts is to take active steps to reduce the use of credit cards.

There are different costs by members of the household that may not need to be accrued. An extra car, for example, can be sold in order to reduce monthly costs. Changes may also be made to your home to reduce utility bills.

Image source: pexels.com.

10 Steps to Create a Successful Stay-at-Home Mom Budget

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stay-at-home mom budgetDo you dream of becoming a stay-at-home mom but your family depends on your income? Your dream may not be impossible. It starts with a plan, a lot of self-compassion, and determination. I know from experience. Our most effective tool on our journey to a single-income family with an at-home parent started with a stay-at-home mom budget.

I’d like to show you how.

In 2014, I gave my notice at my job just a few weeks before having my second child. With only my husband’s income, we now had less than $2,000 per month to live on. That may sound impossible, but we spent years preparing for that day. It’s amazing how little income you can live on when you don’t have a car payment or student loan debts. It’s amazing how free you feel when you make such an empowering decision like staying home with your children. I

It’s amazing how little income you can live on when you don’t have a car payment or student loan debts. It’s amazing how free you feel when you make such an empowering decision like staying home with your children.

I wish that for you.

This list of steps will show you exactly how we beat the odds and successfully transitioned into a single-income family of four.

10 Steps to Create a Successful Stay-at-Home Mom Budget

Let me just say we stunk at budgeting before my husband and I got married. Like really stunk at it. I even worked as a teller and couldn’t keep my finances straight. I can laugh now, but it caused its share of anxiety in me at the time. I dreamed of staying home with my children someday, but our debts and sloppy spending made it felt unachievable then.

These 10 steps revolutionized so much more than our budget. It reshaped my mindset about money, my role in our marriage, how we communicate, and how we plan for the future. Check ’em out:

Take a financial snapshot.

Look at what you’ve been spending, how much you owe in debt, what you have in savings, and what you earn each month. It takes time, but this is a great starting point for anyone looking to improve their finances.

Before you ever write another budget, make sure you’re aware of where your money is really going.

Calculate how much you NEED to live on each month.

This number is vital. It’s not how much you spend on cable or fast food or extra clothes for the kids. This is the total you need, absolutely need, each month to keep the lights on, put gas in the tank, and feed the family.

A great way to calculate that number is to add up your monthly bills. They’re typically a set amount. Then, include things you typically buy in a month like food and gas. This is the baseline for you to plan your stay-at-home mom budget. You know this much needs to come in. If you and your spouse currently bring in more than that, then let’s talk about some ideas for that extra money next.

Build up a buffer.

When you reduce your family income, it’s paramount to have an established savings account for unexpected expenses. Millions of families live paycheck to paycheck with no clear financial plan for the next blown transmission or trip to the ER. You can set yourself apart from that statistic. Choose an account today and commit to putting away $1,000 for emergencies only as fast as you can.

Demolish debt.

Eliminating as many monthly payments from your life as you can before you become a stay-at-home mom is huge. If you’re already home with the kids, it’s still as important as ever.

For example, my husband and I started applying more and more of my paycheck toward student loan debt. What we thought would take seven years took less than two. Intentionality will bring about big results in your life.

Meet regularly with your spouse or accountability partner.

While my husband and I were paying off extra toward debt and saving for emergencies, we met regularly to discuss our budget. We still do. It isn’t always easy, but carving out a 15-minute window once a month to make sure you’re on the same page will reduce your stress and set up your stay-at-home mom budget for success.

Need some help creating a budget? Here are several free downloadable budgeting forms.

Sleep on big financial decisions.

Give yourself a 24-hour window before you make any purchase more than a set dollar amount. This is especially important for houses, automobiles, furniture, and the like.

Leave room for fun.

Even though you’ll have less money in the budget once you’re a stay-at-home mom, it doesn’t mean you can’t have fun. If it’s in your spending plan (and preferably not on a credit card), plan for fun outings or date nights or taking the children to the zoo. I even recommend a little fun money for you and your significant other to spend however you wish. A little freedom helps you life when finances tighten up.

Don’t compare yourself with others.

With social media, it’s almost impossible to not compare your life with others’. Remember this, though: It’s entirely possible they’re in debt up to their armpits and you don’t know it. Remember your reason for wanting to stay home. It may mean you have to live in a smaller house for a while, but the trade-off is more time with your kids.

Employ self-compassion when you fail.

You will fail. Your spouse will fail. Rather than give up and quit budgeting, give yourself some grace and try again. I’ve derailed more budgets than I can count. Working through that frustration and stress was like working a muscle. You will grow your abilities, too.

Focus on your behavior, not your numbers.

Ever read that quote about personal finance being 80 percent behavior and 20 percent head knowledge? It was true in my case. When I stopped chasing my credit score and started chasing a debt-free mindset, my account balance changed dramatically. What are some behaviors you can focus on that’ll help you establish a functional stay-at-home mom budget?

“What’s my next step?”

Hopefully, this article gave you some ideas on how to begin this journey. It’s meant to inspire and educate, but one blog post can only offer so much.

What I needed on my own journey toward staying home was a financial roadmap. Much of my husband’s and my experiences were trial and error (and more errors and some more errors). Beating the odds in 2014 lit a fire within me to help other women achieve this dream.Paperback-Book-Small-Spine-Mockup

That’s why I created a companion eBook to this article called “The Stay-at-Home Mom Blueprint.” It’s packed with 150 ways to chop debt, save money, earn a side income from home, and implement a financial plan that WILL enable you to spend more time with your kids.

This eBook contains everything I wish I’d known when I started my journey, from surviving our first messy budget as newlyweds to figuring out coupons to earning my first $10,000 with my at-home writing business.

If this is your dream to spend more time at home, then I wrote this for you. Look, it’s not easy. We spent years making this transition without a guide like “The Stay-at-Home Mom Blueprint.” Even so, it was worth it. Your journey will be, too.

May this resource empower you to take these steps to achieve what matters most to you.

Ready to grab your copy? Find “The Stay-at-Home Mom Blueprint” available here.

What’s your number ONE hurdle that prevents you from spending more time at home? Tell us about it in the comments below!

This post contains affiliate links.

Are you a stay-at-home mom? Make sure you bookmark or pin some of these resources for later!

How to Save Money – 35 Top Ways for Parents to Save Money

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how to save moneyNo matter what you earn in a year, if you’re raising a child, then saving money is going to be a huge part of your life. You’ll save for diapers, school supplies, soccer cleats, and college. To help in your frugal efforts, here is a master list of how to save money.

Many of these tips came from real parents discussing this important topic via SavingAdvice.com.

How to Save Money – 35 Top Ways for Parents to Save Money

This is one of those articles that can be a useful resource for you, time and time again. As you read through, there will be things you can apply to your life today, but some tips may not apply til later. I suggest you bookmark or pin this post to ensure you have access to you it later.

  1. Switch to bank accounts with no fees.
  2. Cancel unused memberships.
  3. Cancel subscriptions. Examples include magazines, newspapers, online entertainment, dating, or networking memberships.
  4. Skip the cafe and bring home brewed coffee to work.
  5. Eat out less; cook at home more.
  6. Save money on your electricity bill. Install a smart meter (some libraries loan them out for free) to measure how much electricity your appliances are using. You could be saving more by simply unplugging what you can.
  7. Contact your cell phone provider to ask how to save money on your bill. They may have a discount plan to offer.
  8. When other phone companies cold call you, ask if they can beat your current company’s price.
  9. Are you looking at a phone for your child that’s only to be used for emergencies? Try buying a prepaid phone rather than something on contract.
  10. Comparison shop. This is huge for every major purchase in your life – from cribs to colleges.
  11. Don’t buy “convenient foods” when you can make something from scratch. Frozen meals are quicker to prepare but you pay for the convenience and they’re often much less healthy for you.
  12. Buy in bulk versus smaller quantities at traditional supermarkets (Costco, Amazon’s Subscribe and Save).
  13. Batch your meals on the weekends. By preparing a large quantity of breakfast or snack foods during the weekend, you’re setting up your week to be more frugal and freeing up a considerable amount of time.
  14. Save those pennies and dimes. Designate a family piggy bank for all your coins. When it’s full, go do something fun together.
  15. Don’t balk at used items. Yard sales, thrift stores, and online garage sales may have just the items you’re looking for at a fraction of the price. Children’s clothing is a prime example, especially when they’re very young. They grow so fast!
  16. Whenever you can, shut off your heat or air conditioning and throw open those windows. You’ll save a considerable amount on your utility bill in the long run.
  17. Get creative with transportation. Can you carpool, ride a bike, or even walk to work? These may seem like extremes, but they’re also fantastic ways to save money on gas as well as preserve the life of your vehicle.
  18. Reconsider that credit card “deal.” As popular as it is to accumulate airline miles or to snag that 30% savings at Kohl’s consider the long-term drawback your experiencing.
  19. Be mindful of your spending habits. If you’re bringing home a paycheck, but there’s nothing left at the end of the week to drop into savings, then it’s time to dig in and evaluate what you’re really spending.
  20. Clip or download coupons. Apps like Cartwheel or Paribus or RetailMeNot can give you convenient methods for saving on weekly expenses.
  21. Wait at least 24 hours before making a large purchase. Give yourself a chance to come down from your “fever” to make a more thought-out decision.
  22. Check your wallet. By knowing how much money you have before you walk out the door, you’ll be aware of what you can and cannot spend throughout that day.
  23. Pack your lunch.
  24. Find some free hobbies.
  25. Identify wants versus needs.
  26. Lower your car insurance by combining policies or paying it annually instead of monthly.
  27. Learn how to save money on child-related taxes. See a full run-through of your options here.
  28. Launch a “No-Spend Challenge”. Choose a spending category (i.e. fast food) and set a time for not spending any money in that category.
  29. Try the 52-Week Money Challenge. Learn how to save over $1,300 a year here.
  30. Use a monthly budget. I know from experience that this will help you conquer debt more quickly and save money before you ever spend money elsewhere.
  31. Find deep discounts on Amazon merchandise through SnagShout.com.
  32. Don’t spend your tax return; save it.
  33. Automate a monthly transfer into savings. You’re much more likely to stick with it!
  34. Pay $100 extra on your mortgage each month. This doesn’t save money in the short-term, obviously, but you’ll save thousands in interest over time.
  35. Get accountability. However you’re saving money for your family, one of your most powerful tools is support. Not only does my spouse hold me accountable on a continual basis, but I love feeding off the positive energy in a supportive Facebook group of like-minded savers called “Your Debt Freedom Family.” We only discuss things related to our families and our finances – no spam or marketing. If you’d like to join, you can do so here!

The biggest progress I made when I was trying to figure out how to save money as a parent was remembering my “Why.” In my case, it was the little one growing rapidly in my tummy. She didn’t know it at the time, but my first child gave me strength, every day, to cut back, live on the budget, and save. It was worth it for her.

What’s one money-saving tip you’d add to this list? We’d love to hear about it in the comments below!

Are you a stay-at-home mom? Check out these bonus resources just for you!

Helping Family With Financial Problems

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Helping family with financial problems can be extremely tough to do. These are the guidelines I set when a family member needs financial help.Money issues can often become a family issue. When we were younger, my sister was the saver and I was the spender. At any given time, my piggy bank was likely empty as I had just bought something while she probably had the first cent she ever saved. Things have drastically changed as adults.

My sister tried to justify every tiny purchase and as a result has a hard time getting out debt and putting money into savings. She may be my younger sister but she is an adult and should probably be able to manage her finances on her own, but she has come to me (multiple times) for help. She’s never actually asked for money, just help with managing things which I don’t mind doing.

Knowing when to step in and help a friend or family member with their finances can be hard. Even advice can be hard to give sometimes as money is so personal. You really need to know and understand each other’s spending habits to really be able to help.

Establish Boundaries

Before you agree to help someone you need to establish boundaries.

I agreed to help my sister with a budget and getting everything set up but that’s it. At one point she asked me if I would actually control her money for her, only giving her an allowance but that was too much for me.

Not only does she really not learn anything about managing her own money, it would be a lot of work for me as well to actually manger her money as well as mine. I wouldn’t want to be responsible for accidentally screwing something up. Some people may be ok with actually taking over someone else’s money but I wasn’t so I made sure she understood exactly what I was willing to do and not do.

Make Sure You Have Time

Helping someone with their money- even if it’s just setting a budget up can be very time consuming. If you’re willing to help make sure you actually have time set aside to help them or it won’t be beneficial. I agreed to help her again set up a new budget but I won’t have time for a few weeks to set aside and actually discuss everything with her. Especially with little ones around, I will need a few, uninterrupted, hours to dedicate to her. I’ve agreed to help but she will have to wait until I’m ready.

Be Prepared to Walk Away

The first time my sister approached me to help (a few years ago) I could tell it was going to be a total waste of time and effort. She wasn’t in the right mindset and shot down every suggestion I made. Even though I knew she needed to follow the advice I was giving her, I just knew she wouldn’t. For my own sanity I walked away. I told her we’d come back to it when she was ready to take it more seriously which, a few months later she did. If you’re both not on the same page, walk away.

Helping a friend or family member with a financial issue has the potential to divide people. I totally understand why some people refuse. Thankfully my sister and I are able to maintain a good relationship despite these things and I’m happy to take responsibility for the positive changes she has made.

Have you ever helped a friend or family member with a money issue? How did it work out?

Sounds Like You Discuss Family Finances With Your Kids?

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Wondering if you should discuss your family finances with your kids? I think you should. Here's why.I had a conversation with a woman I know recently about money and kids. She made a comment about hiding her income tax papers from her kids so they wouldn’t come across any details of her and her husband’s income. ‘’I don’t want them seeing our gross income and suddenly thinking we’re rich and they can have anything they want’’- she explained. She and her husband make decent income and she is doing her best to hide this fact from her kids. She is of the opinion that children shouldn’t be involved at all with their money.

She and I differ. I think kids should very much be in the know when it comes to family finances. They need to know and understand how money works and where else can they learn (multiple times), with the security that is home? Though I have learned quite a bit about personal finances, it was all self-taught, as an adult. In the situation of this couple, she has a learning opportunity with her kids to educate them. She can, and should, teach them how far money really goes.

I read something once that said the easiest way to teach kids about taxes is to eat 30% of their icecream. She can start with this point. Show her kids the number on paper and then show how much is taken away in taxes. Now there isn’t as much money, is there? Kids think $100 is a lot of money when in reality you’re only taking $70 home for every $100 earned and of that $70 it gets split between food, housing, savings, and family activities it really doesn’t go as far as a child may think and they need to see this, not be sheltered from all finances.

Saving is so important. Both Long term and short term savings goals are not only vital to financial success but help prevent debt- one of the most important financial lessons you can teach your kids. Even though it may be your retirement goals, kids need to see how much work it is to reach this goal. Maybe you’re saving for their post secondary, show them. Let them know how much of your money you put aside every year for their future goals.

Financial education is not something we can assume they will learn outside of the home. Unfortunately they don’t learn enough about it in school, despite it being one of the most important skills a child will ever learn. Kids will appreciate the trust you give them in discussing the family finances. There are many ways you can go about actually having the conversations and you can release as many or as few details as you want. I’m of the opinion that it’s a family unit and though there may only be one or two income earners the money if for the family, the more transparency they better.

Do you share financial details with your children? If so, how much detail?