5 Bank Accounts Every Family Needs
1. Personal Checking Account
This is the account that is for you and only you. Think of this one as your holding account. There should be a balance in it but the amount shouldn't be important. It's in this account you want your paycheck(s) going into. Remember, only your paycheck should go into it. Not your spouse or significant other's (SO) paycheck. They should have their own personal account.
Relationship arguments about money start when income is deposited into one account.
Some people may think that keeping their income separate from their significant other may seem selfish, but I truly believe it's important. Relationship arguments about money start when income is deposited into one account.
Keeping your income separate may seem selfish but I truly believe it’s important. Relationship arguments about money start when income is deposited into one account. You can avoid this mistake by making sure your income’s going into separate accounts. My wife and I do this and we’ve never argued about money. She can spend $50 on Amazon while I’m off spending $50 on beer.
Just make sure you keep enough in here to cover your own personal expenses (car payment, insurance, credit card, occasional beer or amazon purchases).
This is truly your holding account where once the paycheck is in it’s time to transfer portions of it out.
2. Joint Account
This one is for the household bills such as utilities and rent or mortgage. Yet again, balance isn’t important. Just make sure you keep enough in here to avoid any bank charges for low minimums. I keep a monthly bills spreadsheet. I’ll enter each month’s bills then divide it in half. My wife and I make our transfer at the same time from our personal accounts into this one, typically by the 15th of the month.
3. Joint Emergency Cash
It’s said you should keep six months of expenses in this account. I fully agree with that sentiment. This account should be your out of sight, out of mind account. Every month you and your SO should match contributions into it. What’s the right amount? That all depends on your budget and what you can handle. It will take time to build this up so be patient.
I include the monthly contribution into this account in my monthly bills spreadsheet. It turns that amount into the out of sight, out of mind contribution it should be. This can be done with an automatic transfer once a month from the joint account. For me I have this set up to occur on the 20th of each month.
Remember, this account isn’t just to cover six month’s of expenses. It should also be used for that unexpected expense such as an extra cavity or two or a plumbing leak.
Once you hit that six month of expenses saved mark, don’t stop. By that point this will truly be an out of sight transfers. The larger the cushion you keep the more secure you can fill knowing you can handle most unexpected surprises.
4. Personal Savings Account
Just like the personal checking account, this should be separate from your significant other (SO). This is so you can build up a cushion for any surprises on your personal expenses. These are your expenses and asking your SO to help cover them when a surprise pops up may cause friction. Knowing you have something set aside to handle can bring piece of mind. You won’t need to worry about how to approach your SO needing to borrow money because of car maintenance.
5. The Joint Fun Account
This is for those fun expenses like a day trip somewhere, a road trip to see family or a getaway to Disney World. Instead of struggling to find the money for that much needed trip with the family you know there is an account set-up with money in it.
My wife and I handle this much like the emergency account. I include this in the monthly bills spreadsheet. It’s another out of sight, out of mind transfer. This amount isn’t large compared to the family emergency savings. That should be your top priority in building up.
This one can be another automatic transfer. In my case it’s done on the 25th of every month.