Do you manage routine & irregular expenses from same account

[ohgillian]

Sometimes I think I overly complicate things. I use my checking to pay all routine bills and other small/incidental expenses. Then I transfer a few thousand (ETA: approx 35% of monthly take home) to a separate account each month, and use that to pay large and irregular expenses. I probably make one or maybe 2 payments out of the "irregular" account per month. This would be things like, federal income taxes, vacation expense, a four-digit medical bill, something new for the house that's over $1k. Etc. I also, twice a year, transfer money from this irregular account to our car fund which is at Vanguard.

I don't know, I'm not having any problems with the current set up, but I always like to hear how other people do things to see if there's something out there I like better.

Part of what is prompting this thinking today is that I am about to do a refi where I won't escrow for the first time, and I'm updating my spreadsheets for that.

[imojoebunny]

DH and I have seperate accounts. He keeps a lot in his account for escrows, taxes, and the rando expensive things, like roofs and plumbers. We have 4 houses though, so those things come up often. In your shoes, I would keep enough in the checking account for most extra expenses, like the $1000 a month that comes up each month, or whatever your regular overage is (mine is around $1000, over my basic budget on average), and transfer only when something big pops up. We sort of accrue each month for the houses we do not escrow (3 of them, about $40K a year for taxes, insurance, and fees + money for repairs), and DH keeps that money in his savings account, attached to his checking account. It doesn't have fees for too many withdrawals, unlike some savings accounts, and he can move the money easily online. The thing I don't like about our method, is that is it hard for me to see savings from my basic budget in my account, so if I don't buy something to save up for something I really want, I can't really see that savings. I know it is there, because each month, I calculate what I spend over or under my basic budget. but it isn't necessarily in my personal account, so when I spend it, it feels like I went over, but I really didn't, if that makes sense. Overall, it doesn't really matter, we have a budget, and we are pretty good at sticking to it, so the money is there. We have seperate accounts so we don't have to talk about money often, just once a month or so, and we can more easily manage our own budget items and account balances.

[statgirl]

We have an emergency fund in an online bank. All other “cash” is in a local credit union, where we have a checking and savings account. All money goes into the checking where I pay all bills out of. I sweep all money above a certain limit into the savings at the end of the month since it pays more interest. For the combined checking/savings balance, I have a spreadsheet that shows sinking fund balances. It is two pages—totals and expenses. I update expenses as they occur—generally every three days if not more often. We pay 90% of expenses with our CC (also at the credit union) so it easy to pay off every few days. If we have large expenses (above my threshold), I’ll move money back into checking as needed.

[wildrice]

Nope, we just have 1 checking account and 1 savings. We do everything joint, so the only transferring between accounts is when we move money to savings, or pull from savings to cover something.

I do put almost all of our expenses, including several bills, on our credit cards to get points. So there are really only a handful of payments that come out of checking each month - mortgage, student loans, phone bill (since I pay my parents), car payment, and credit card bills.

I have never saved separately for specific things, I just have 1 savings account I call our emergency fund but if we need to pull money out for something like those things you listed, I do. I've thought about having separate savings accounts for separate things, but at this point it's rare that we pull from savings for unplanned purchases, so I don't feel like there is a lot of danger in mixing it all together in 1 account.

[wanderingback]

I just got back in to YNAB now that my income has gone up and things are more stable now since the beginning of covid, so I've been thinking a lot about this today.

So right now I have 2 checking accounts within USAA.
It's mostly psychological of course. I have one labeled "bills" but that's really just the auto payments for the rent and mortgage. So throughout the month I transfer money into the "bills" account, so it's not just sitting in the "spending" checking account making me think I have more money than I really do, since those expenses total to over $5,000. But otherwise the rest of monthly expenses come out of the regular spending account, including my student loan, utilities, etc. 

I do also have a savings account with USAA that mostly sits empty. I use it if I have excess money at a particular moment, but know I'm going to spend it very soon, like the next month (like if I had knew I had a wedding to go to the next month or something like that). So I transfer money in to the savings account to just sit there for the month and then transfer it back the next month. I find that easier than transferring back and forth to capital one, capital one is supposed to be for savings that I really don't touch. 

[ssmjlm]

It depends?

I have our checking and a small savings at the same bank. The savings account is for things like car insurance, maybe some unexpected car things.

Then our efund and car fund are at Cap360. The efund basically covers everything not planned and we can’t pull from extra money in checking.

[k3am]

I probably overcomplicate things, but it works for me. I have our standard checking account that all of our funds come in and out of. This usually has a balance anywhere between 1.5-2x our monthly expenses in it. And then I have multiple cash savings accounts held at Capital One that get routine transfers to them. Savings (we build up to a certain $$$ amount then transfer to our brokerage account occasionally), vacation, home improvements, and taxes (income and property taxes).

Psychology, it's easier for me to spend money on a vacation if it's in account that's been earmarked for vacation. And when our income tax bill gets paid in April and my bonus gets paid on 3/31, it feels a lot less like my bonus is going straight out the door.

[agnes]

One account but has separate checking and savings. I transfer “extra” money to savings and then transfer to checking if there is going to be a large purchase. But generally I just keep enough for regular expenses and try to pay everything out of checking with out transferring from savings.

[jamaicam]

I do something very similar - every month I transfer money to a separate account for large annual purchases. Car and house insurance. Kids school fees. Summer camps. Car services. Vacations. Christmas.

Then what is left in my account is what I spend that month.

It really helps me to budget as my house and car insurance both fall near christmas so I wouldn't want to be paying them from one months salary!

[5thofjuly]

We keep the irregular expenses on our checking out because it seems like at least one gets paid per month, but we also budget monthly for them in Quicken. For example, we put $20/mon in the HOA fee dated 2-1-21 since it’s due in Feb. So, right now, we have an “extra” $160 in the checking account since we’ve put aside that amount each month.

[tcu2003]

We just have a checking and a savings account. Part of each of our checks are direct deposited to checking and part to savings. Whenever the larger expenses come up, we’ll move money from savings to checking as needed, or pay the CC bill from savings instead of checking that month ( all 3 are at the same bank and we put nearly everything on the CC each month and pay it off).

[sandandsea]

We use our regular account for all expenses. We self escrow property taxes monthly into a different account and save $x every month that is automatically moved into a savings account. If we have a big expense we can’t cover from our regular account (like a vacation) we will dip into the savings but we really try not to and try to use mo they funds to cover it. We try to have a flexible budget so we rarely have to touch the savings. Note the “savings” is additional savings beyond our emergency fund or retirement.

[lolalolalola]

No we just have one checking account and that is it.

We have a spreadsheet with all of our forward expenses mapped out by month so we know how much we are able to invest/ pay down on the mortgage vs leaving a large balance for future planned expenses.

[madringal]

We have two main checking accounts. One is for all the fixed bills (mortgage, tuition, life insurance, car payment, auto insurance, gas/electric). WE have direct deposit set up to put exactly in right amount in there (with like a $100 cushion) each month, and then each bill is auto debited out if. Basically the money comes in and goes out without us having to even think about it.

The other account is for bills that are not the same each month (water bill, cell phones, random medical bills) and then all other spending (groceries, gas, prescriptions, kids sports, eating out a a family, clothing).

Having the two accounts means, I don't ever really have to worry about moving money from one to another. I never have to think "ok my car payment is coming out this week so I need to leave enough in the account to cover it).

We also each have our own small spending account that gets a couple hundred bucks a month. As well as a joint savings.

All of our accounts are funded by direct deposits, so we just don't have to worry transferring each time one of us gets paid.

[mich1]

I work the same way you do. I have a checking account that I pay regular expenses from, and feed a savings account that I tap for unusual expenses and I use to fund my Roth at the end of the year.

I work on the KISS principle. DH has a dozen different accounts (actually, only about 4 but it seems like so much more!) and it seems like he's always trying to figure out where he paid something from. Generally, anything 4 figures gets paid from my savings, so I really don't have to think about it too much. As long as I do not need to make more than 3 debits against that savings account each month, it's not a problem. I think I've only come up against this once in the last 5 years, when DH and I were trying to cover something unusual.

[mcsangel2]

We have one account but several subaccounts. Checking is where our expenses are paid from. Money market savings is our cash efund. We also have subaccounts for vacation, gifts, home (big expenses and also saving a down payment for the next house), car (big expenses and saving to pay for next car needed in cash), charity, and another subaccount where I stuck the five figures I inherited from my mom's estate, likely to be used for the next home purchase.

We only keep enough in checking for expenses, leftover money gets divided up between the other subaccounts.

[Roc A Bee]

I have a Capital One account with sub accounts- one specifically for vacations. I try to keep only enough money in my savings account for the month. I move money to Capital One every time I get paid.

If a big bill came up, I’d move money from Capital One to pay it or more likely charge it for the points and then pay it off from Capital One.

[expectantsteelerfan]

We have 4 accts...a checking for dh and one for me, and 2 savings, all linked. I do all our money managing, and after payday, I leave enough in dh's checking to pay for our mortgage and for some 'fun money' for him. I put enough in my checking to cover all our other bills. The rest gets split between regular savings and our house fund (and before we were saving for a house that savings was used for vacation or anything else specific that we're saving for). If an expense comes up that needs dealt with before the next pay day, I take money out of savings to pay for it.

[minzy]

Definitely do what works for you... We do everything from one checking account, even the irregular stuff, but we probably keep that fuller than we “need” to. My sister and BIL have all these “buckets” and it just sounds stressful. They have the means (and if they didn’t, it would be a different story) but are always worried about topping off this or that bucket another $50 or whatever before they do something. I think, but the money you want to use already exists and is just over in another huge bucket, why not just get it from there now and pay the bigger bucket “back” when you get paid on Thursday and not make everything overly complicated. It’s just semantics and accounting, no need for all the fancy footwork... but BIL is very debt averse (even if he’s just borrowing from himself) and it works for them, so whatever.

[Accountingcat]

I pay regular bills from a checking account. I have a sinking fund set up for large regular bills that aren't paid monthly which I fund a set amount per month (car ins, life ins, car registration, property taxes, etc.). Everything else goes on a credit card. That includes surprise bills and tiny purchases like shopping. I pay off the credit card every paycheck cycle. Very rarely I have to carry a balance due to a crazy irregular bill. This works for me because I adapt my spending. Like last month I had to pay a $3k plumbing bill, so zero shopping or eating out for me. This probably isn't a good system if you are a spender.

eta: I have a seperate emergency fund that I really try to never touch.

[lust2hart]

We have one checking account and a few savings accounts (car, house, and travel). We direct deposit into our checking account and budget out of there. Our budget includes lines to transfer money into the various savings accounts. When we have an expense that's too big to come out of our regular budget, we transfer money from the appropriate savings account into the checking account to cover it.

[Accountingcat]

Just going to add this for Ally bank users, I realized they have fake "buckets" as an option on their savings account. Basically, you can label all the money in one account to various items.

[awkwardpenguin]

We have one checking account and one savings account. I manage all the "buckets" in YNAB and it doesn't actually matter where the money physically is as long as it's in an on-budget account. It's really simplified our finances over using several separate savings accounts before we adopted YNAB.

[jlt19]

I'll definitely need to rethink the way I do things when I'm down to one income but for now, we're both paid twice a month. Everything possible goes on CCs for points. There are two used. Most everything else is auto-deducted from the checking account.

Both checks go into savings. Then I have a spreadsheet that has the bills/payments/etc (including auto IRA and investment savings) separated into two sections based on when they're due or deducted. So on the last day of the month, I transfer whatever is needed for the 1-15th to checking. Then do the same on the 15th for the 16th-31st. Whatever is left is short term savings for the irregular expenses.

[Deleted]

We have two checking accounts and then a lot of different savings accounts. H's entire paycheck goes in to our joint account and that is where most of the bills are paid out of. Then my paycheck gets divided up between emergency savings/christmas club account/auto savings account/vacation savings account, my checking to pay my car loan/personal loan/LOC account, and then the balance of my check goes in to joint savings. When we get bonuses throughout the year, that money gets thrown in to a savings account and then earmarked for things like home improvements and we just transfer as needed.

I keep a pretty detailed budget spreadsheet so I always know how much money is where. Plus, I pre-plan a year in advance, so I already know every bill that needs to be paid through the end of 2021.

[juliej]

Oct 4, 2020 16:04:56 GMT -5 wildrice said:

Nope, we just have 1 checking account and 1 savings. We do everything joint, so the only transferring between accounts is when we move money to savings, or pull from savings to cover something.

I do put almost all of our expenses, including several bills, on our credit cards to get points. So there are really only a handful of payments that come out of checking each month - mortgage, student loans, phone bill (since I pay my parents), car payment, and credit card bills.

I have never saved separately for specific things, I just have 1 savings account I call our emergency fund but if we need to pull money out for something like those things you listed, I do. I've thought about having separate savings accounts for separate things, but at this point it's rare that we pull from savings for unplanned purchases, so I don't feel like there is a lot of danger in mixing it all together in 1 account.

Hello, person describing exactly what we do. Except for the phone bill part; that we put on a card to get points too. Our only decision is which card to put things on, because some have better rewards than others for certain categories.

[mokes]

What is the benefit of having 2 separate accounts for expenses? I don't think I follow. Is one of them a savings account so you can earn more in the meantime on the money for irregular expenses?

We just use one checking account for all expenses, no matter frequency. We keep a certain minimum in there and transfer money out to brokerage accts periodically.

[mpc]

Our bank lets us have 3 kind of subaccounts with our checking account. I put a budgeted amount of money in each and then pull out when needed. They are vacation, car maintenance, and taxes/insurance (because we don't escrow). If they let me have one more I would do home improvements/repairs. We also have a separate savings account. Anything that doesn't fit in those categories comes out of our regular checking account cash flow. Once or twice a year we might make a large purchase and agree to take it directly out of savings (hello solar panels).

[quesyrah]

I use different checking accounts for this. I have an account called “save to spend” and $X from DH’s paycheck goes there each week. That’s what I use for if a car needs tires, oil changes, an unexpected medical bill, etc. Expenses that pop up outside of our regular expenses. It doesn’t earn a ton of interest, but I like that I can use the debit card to spend right from the account.

I also have an annual expenses account where another $X gets direct deposited each week. This covers property taxes, vehicle tags, homeowners insurance and AAA renewal.

[quesyrah]

Oct 5, 2020 7:56:01 GMT -5 Cappy said:

I have a CapitalOne360 account with 6 different subdivided accounts. I'll move money monthly into those accounts for short term savings, e-fund, our escrow, kids savings, vacation fund, etc. If something comes up where I'd be spending out of one of those accounts (ex. tires on the car) I'd charge it on a card then transfer over the $ to pay. For something like property taxes we do an ACH transfer direct from the account to the county. I have a line item "Fun" in our budget for all the smaller junk that comes up-- school pictures, gifts, etc.

I accidentally hit post before I was done but we use Cap One as well. We’ve been with them since it was ING.

I have 5 different accounts

Checking- mortgage, monthly expenses, discretionary/fun/entertainment whatever you call it

Save to spend
Annual expenses
New vehicle fund
Vacations

I also have an emergency fund but it’s fully funded with the number we wanted and we haven’t touched it so don’t currently contribute.

It’s a lot but it keeps me organized!