Overtime, we have accumulated a lot of accounts. They each serve a purpose in our system. And I do think it can be made simpler.
Inspired by the dividend life article, I started to map out our accounts and money flow. It was an interesting excise to make. Here is the result
The yellow accounts are mine. Yes, I do have a lot. For my former job, I did watch the competition and had active accounts with them. Next to that, I also shop around to get the best deal for the product I want. There are some unused accounts in there. They are closed now.
Some elements worth nothing
- All regular flows are automated. The split of our paycheque into fun money, life happens, household expenses, investing is done for us. No hassle what so ever. This makes a more complex account structure effortless. The only exception are the one off yearly times like holiday allowance, bonus, tax refund. The amounts and timings are not known up front this hard to automate
- Both my wife and I have a fun money account. At the start of the month, this account holds our monthly discretionary spending budget. We can use this guilt free for anything we want, not everything! (thx Affordanything for the quote) Clothes, shoes, eat out, concerts,… you name it. No questions asked. We can also accumulate money here to save up for a bigger item.
- The basic of our investing is automated: the fiscal deductible pension saving and long term saving. This way, we pay our future self first! I hope they will appreciate it.
- We also save money for our kids and god children.
- I have a special account to save up for our 10 year marriage. I heard once a story of a husband who bought his wife each 5 years a new ring. Now that his daughters are holder, they can go along and pick the ring. It is theirs lateron… I had an instant good feeling with this and decided to do the same!
Lessons learned and next steps
To me, it is ok to have that many accounts as long as there is little to no work involved in maintaining them. And they need to be free. For both cases, I can thick the box. Transfers are highly automated and I pay for none of my accounts! Some of these accounts even pay me. How is that!
Our money is decided into different buckets. The main buckets are
- Emergency fund
- Life happens fund
- Travel fund
- Investing fund
Right now, a spreadsheet keeps track of what money is tagged where. Going forward, I plan to set up an account for each fund. That way, it will be even more straight forward to see what money belongs where. It will also help to hid the emergency fund out of plain sight.
What does your account structure looks like?