Personal money management

[squeegee]

Hi Friends,

I just implemented a new system of managing money for myself and I'm going to share it with everyone. What makes it so cool is that it helps you feel rich because your money is under control.

I got the suggestions from Dan Kennedy in his book Wealth Attraction for Entrepreneurs. He said when you automatically divert a percentage of income to savings, and a percentage for giving away, it does something to your psyche which can't be explained, and the effect is that it causes you to earn *more* money. He admits it sounds like he's smoking crack but urges the reader to try it for 90 days.

My bank lets you create up to 5 or 10 'extra' savings accounts which are intended primarily for dividing up your existing account. I'll show you what I mean...

Savings - this is my primary account for transactions. Money goes in here, and this is the account which is connected to ATMs.
Savings (G) - I funnel 2.5% of all my income here - this is an allocation for giving to charity or any other destination for which I do not receive quid pro quo / something in return.
Savings (S&I) - I funnel 10% of all income in here, for savings and investment. I never take anything out unless it's going to a real investment (extra principal payments on a loan qualify as investment, but the ordinary monthly payments do not)
Savings (L) - to allocate money towards paying back a personal loan
Savings (T) - money set aside to pay tuition monthly for a course I'm taking

I'm considering creating another account purely for an adventure/mini-retirement fund - and I would put $1000/month into this account, and of course add an expense of $1000/month to my TMI calculation.

And so on, for rent, car, food, etc. When I need to actually spend this money, I take it out at the ATM and keep the cash in separate piles. (or I transfer it to the credit card if I spent the money via the CC)

All the essentials are 'spent on paper in advance' and when there is money left over it becomes fun money, which feels great to spend!! :)

[cheez avenger]

What bank let's you do this???

Multiples savings accounts under 1 bank??? What about fees?


Do tell. ;)



-cheez avenger

[squeegee]

it's Royal Bank* and they call it eSavings accounts.

the 'catch' is that there are huge fees for any transaction other than via online banking. It is free as long as you only interact with it online (which works for me).

I did not know about it until i called the bank and told them what I was looking for.

* this is a Canadian bank

[Vagabond]

Hi Friends,

I just implemented a new system of managing money for myself and I'm going to share it with everyone. What makes it so cool is that it helps you feel rich because your money is under control.

I got the suggestions from Dan Kennedy in his book Wealth Attraction for Entrepreneurs. He said when you automatically divert a percentage of income to savings, and a percentage for giving away, it does something to your psyche which can't be explained, and the effect is that it causes you to earn *more* money. He admits it sounds like he's smoking crack but urges the reader to try it for 90 days.

My bank lets you create up to 5 or 10 'extra' savings accounts which are intended primarily for dividing up your existing account. I'll show you what I mean...

Savings - this is my primary account for transactions. Money goes in here, and this is the account which is connected to ATMs.
Savings (G) - I funnel 2.5% of all my income here - this is an allocation for giving to charity or any other destination for which I do not receive quid pro quo / something in return.
Savings (S&I) - I funnel 10% of all income in here, for savings and investment. I never take anything out unless it's going to a real investment (extra principal payments on a loan qualify as investment, but the ordinary monthly payments do not)
Savings (L) - to allocate money towards paying back a personal loan
Savings (T) - money set aside to pay tuition monthly for a course I'm taking

I'm considering creating another account purely for an adventure/mini-retirement fund - and I would put $1000/month into this account, and of course add an expense of $1000/month to my TMI calculation.

And so on, for rent, car, food, etc. When I need to actually spend this money, I take it out at the ATM and keep the cash in separate piles. (or I transfer it to the credit card if I spent the money via the CC)

All the essentials are 'spent on paper in advance' and when there is money left over it becomes fun money, which feels great to spend!! :)

I'm so glad you posted this, I have just started thinking about how much easier it would be if I had different bank accounts for different aspects of my life since with ING direct you can manage everything online. But it does seem ike somethign that would gie you control over your money instead of always having to do mental calculations... :)

Thanks!

How is the rest of the book? Dan Kennedy's books seemed a bit gimmicky to me and I was a bit turned off to be honest but I hear good things about them...

[jetpacklife]

Personally, I like the concepts from getrichslowly.org .. lots of basic principles to get out of debt and start growing your savings. Reduce spending and getting rid of that credit card debt has to be your #1 priority. A good high yield savings account is a must once you can save. Are you getting 5%+ interest on all those accounts?

[squeegee]

re: the Dan Kennedy book

I have read only the part that was available for free on Amazon.com (!). One of these days I will buy it. But to sort-of answer your question, I have read Dan Kennedy's No BS series books:
-the one on Time Management, and
-the one on Sales Success.

IMO Dan Kennedy is spot on when it comes to marketing and entrepreneurship. They don't get much better than him. I read reviews on Amazon by people who were annoyed that he promotes his products and marketing newsletter in his book, but I don't mind because I value his advice and probably some day I will sign up for his expensive newsletters.

check your library, that's where I found Sales Success.

[drjudy]

Great ideas on money management! I attended a T. Harv Ekar seminar where he taught similar principles. He mentioned that Credit Unions will offer separate accounts at no extra charge. You just have to name them - Vacation, Mini-Retirement, Boat, etc.

This works. I have had up to 10 mini accounts with my credit union. This has made it much easier to keep track of money.

- Dr. J

[cartoonfan1983]

Great ideas on money management! I attended a T. Harv Ekar seminar where he taught similar principles. He mentioned that Credit Unions will offer separate accounts at no extra charge. You just have to name them - Vacation, Mini-Retirement, Boat, etc.

This works. I have had up to 10 mini accounts with my credit union. This has made it much easier to keep track of money.

- Dr. J

I went to one of his seminars fully intending to do this system when I got home. Sorry, the moment I got home, I could no longer see the logic of it, and stopped doing it the first week. Maybe it's just me.