Money Matters
parcoeliz
member
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Our tech team has launched updates to The Nest today. As a result of these updates, members of the Nest Community will need to change their password in order to continue participating in the community. In addition, The Nest community member's avatars will be replaced with generic default avatars. If you wish to revert to your original avatar, you will need to re-upload it via The Nest.
If you have questions about this, please email help@theknot.com.
Thank you.
Note: This only affects The Nest's community members and will not affect members on The Bump or The Knot.
Seven bank accounts??
I recently read an article on Pinterest written by this woman (organizing pro, financial expert), who suggests that the typical married couple have SEVEN bank accounts! Wtf! If I remember it's a joint checking, wife's checking, husbands checking, emergency acct, regular savings account, "fun" savings account, and one other I can't remember. I'm sure you could google and find the article.
I thought it was kind of ridiculous. Do any of you follow this? Don't get me wrong, I WISH I had enough money to do all of this.
Which brings me to my next issue: she says you need an emergency fund that holds 12 months of salary that you don't touch ever...unless it's a true emergency. Like...you lose your job or crazy medical bills etc. ummm...12 months salary??! And you start saving by putting away 20% of your paycheck. That would take a long time to get to 12 months salary level!
Opinions?
I thought it was kind of ridiculous. Do any of you follow this? Don't get me wrong, I WISH I had enough money to do all of this.
Which brings me to my next issue: she says you need an emergency fund that holds 12 months of salary that you don't touch ever...unless it's a true emergency. Like...you lose your job or crazy medical bills etc. ummm...12 months salary??! And you start saving by putting away 20% of your paycheck. That would take a long time to get to 12 months salary level!
Opinions?
Re: Seven bank accounts??
I actually read that article from Pinterest about 3 years ago and H and I had 7 accounts.
It ended up being a complete mess. We had accounts between 3 different banks up until 4 months ago.
When I added everything up, we had a lot of money split up into all of these accounts. Now we just have 1 personal checking that we both do our daily purchases and bills out of, and 2 savings accounts (1 for saving up monthly for annual payments and the other for our Efund). I also have a checking account at a different bank that I run my business out of.
If you do a written budget on a monthly basis, then there's no need for 7 accounts. We also have "fun" money, but that's put into our budget and is a shared expense. If one of us has a few more things going on that month, then the other person will spend less to make up for it.
As far as the emergency fund, that's a bit excessive. The general rule is 3-6 months of EXPENSES in your Efund. For our family, we feel okay with just 3 months of expenses saved because we can still easily pay our bills if one of us were to lose our job. Once we're done with Dave Ramsey's TMM we will likely save up 6 months of expenses. That efund will go into a Mutual Fund through New York Life. So it won't be easy to touch.
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I think she is using the word "typical" very loosely, lol. I highly doubt many couples have 7 or more bank accounts. Not that there is anything wrong with that, it's just excessive for the average couple.
12 months of expenses...not necessarily income...is a great goal for an e-fund. One million dollars is an even better one, but I don't find either scenario as being very likely for me anytime soon, lol.
Between me & my husband we have 5
Joint checking - for everything (bills, fun, extras)
H and I have 4.
Our Checking
Savings for E fund
Savings for short term goals
His old checking account(Which we don't use)
As far as an E-Fund we only do living expenses. We live off of less than $300 a month right now so a 12 month e fund would only be about $3,600. We have agreed that $10,000 is a much better number and we are about $2,000 away from having it fully funded.
Love: March 2010 Marriage: July 2013 Debt Free: October 2014 TTC: May 2015
I don't get this at all... It costs money to have that many accounts. I wouldn't have my own checking even if i wanted to cus its not free unless i have direct deposit. But either way i wouldn't want to. Right now we just have 1 joint checking and 1 joint savings. And thats all i care to have - all our money goes in and out of that one checking account - SO much easier to manage. It was a living nightmare keeping track of our money for the 2 months before we closed our personal accounts.
daily checking (bofa)
autopay/bills checking (bofa)
e-fund savings (ally)
house maintenance money market (ally)
car maintenance money market (ally)
vacation/weddings savings (ally) - i'm in 3 weddings this year and have 5 more to attend, so having a separate account to save for this is very handy
To each their own. This works for us!
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My aunt knew she would want to stay home once they started a family. I seriously think that they were married almost 10 years before they had kids. My cousins are now in middle school, junior high and one just started high school.
Because of downsizing, my uncle lost his job. They had a 5 year emergency fund but thankfully my uncle found a job in about six months and my aunt picked up a part time job since the kids are all in school, etc.
I can't ever see myself being able to do this but I'm very proud of how well they planned!
We have 5, but FI and I don't combine finances for the most part. They're all free accounts at our local credit unions because we have direct deposits going in them.
1. My checking/savings
2. His checking/savings
3. Joint checking/savings (mortgages goes in/out automatically) and covers our quarterly bills water and HOA
4. My checking for car/school payment, they both come out automatically
5. His checking for insurance payments which come out automatically
We have 9 accounts. No fees on any of them.
We have:
1. My Checking Account (main bank)
2. DH's Checking Account (main bank)
3. Vacation Savings Account (at a local credit union)
4. Savings Account (main bank)
5. 3 CDs (main bank)
6. DD#1's Savings Account (main bank)
7. DD#2's Savings Account (main bank)
We have separate checking accounts, but can push money into each others, our savings account, and the girls' savings accounts (all bank and credit union accounts are fee-free). Between Accounts 3-5, we have 15 months of expenses saved if we don't change any of our habits (like full time day care for 2 children). The girls' savings accounts are just for when they get older- not for college. College savings will start once day care payments are gone. We also have my 401K (fidelity), DH's 403B (AXA), 2 Roth IRA accounts (AXA), and a mortgage (with our main bank).
Bank #2 - online joint account for savings for long term goals (cars, vacations,)
Bank 3 - MY personal money
Bank 4 - DH personal money
Bank 5 - savings money for house - taxes, renovations &
Bank 5 - checking - auto deduct for utilities
additional
Annuity
Investments
Retirement
I find this easy to track., no fees and keeps our accounts covered by FDIC
We don't pay fees on any of our accounts either and they all earn interest even if it is a pathetic amount.
Pretty much all the money from my paycheck goes straight into my checking account which is used to pay all of our bills, then DH's paycheck (he makes a lot more than me, lol) gets split into all our other accounts. We started this as a trial because DH's work was going through layoffs a few months ago and we wanted to try to live off of just my income, and put his income away as savings--it worked for us. When we have kids we would like one of us to stay home with them, so we're trying to save up as much as we can for now.
-My Checking-used for all bills
-My Savings-mostly used to save up for random things we might need for the house or pet expenses.
-My Savings2-a joint account with my mom from when I was little. I still use it to transfer money to her on occasion when she needs it, but aside from that I rarely use it.
-Joint Checking-used for pretty much everything that isn't a bill--ie groceries, eating out, gas, etc.
-Joint Savings-Our E-Fund
-DH Checking-This was for his SLs but now it's rarely used.
-DH Savings-He uses this mostly to transfer some money between his parents and himself on occasion. This one also stores our long-term goal money (mostly vacation funds)
-DH Savings2-Money for our godchildren. We started this as a possible college fund/e-fund for our 2 nieces and nephew. The plan is to give them the money when they turn 18 or 21--no one else knows about this fund except us--DH's brother is horrible with money so we didn't want to let him know about it, but we wanted to have something in case the kids really needed it
-DH is planning on opening up another savings account tomorrow when he gets paid--this one will be for our future kids and to cover expenses. Apparently that article I showed him the other day really hit home.
We both also have Roth IRAs through Fidelity, and DH has a 401k through work.
And I totally agree that the kids shouldn't have to pay for their parent's mistakes. It was easier when we lived nearby and could take the kids shopping for clothes and stuff if they needed it (contrary to what DH's brother thinks, toddlers do in fact need a winter coat and mittens--especially if they live someplace where it snows a lot like Colorado! But apparently we're the weird ones in the family--go figure!) but being long distance this is the best we can do. At least the kids will have some sort of cushion if they ever need it.