I am trying to work on a personal household budget, but I have multiple accounts that I move money around in and I’m not quite sure how to keep track of the money movements since it’s not technically income/expenses. Essentially, to trick myself into thinking I have no money so I don’t overspend, I take everything but our allotted $200 a week and put it into a separate account. From that account is where I pull money for bills/payments.
At first, I thought just tracking all of the money I transferred to the other account as a withdrawal and then any money I took out of the savings account and put back into our checking as a deposit would balance itself out. However, I feel like it’s somehow inflating my numbers, making it seem like we have more money every month than we actually do.
I don’t know if it’s relevant, but I just use a simple Google Sheet setup where I monitor income, overall expenses, and then spending within categories to see where most of our money goes.
If you’re using two accounts to keep track of your money then you’re correct that moving money from one to the other is a withdrawal from the first one and a deposit to the other. If you want to know where you stand in total, you could have a third ‘account’ that’s just the sum of the other two. That would be a good check to make sure money is not appearing or disappearing just due to movement between the accounts.
@Marley
Okay so theoretically I am keeping track of the movement of money correctly because I’m only looking at the main checking account when it comes to calculating my income/expenses?
@Marley
Yes, the two accounts that you’re moving money between are like moving money from one pocket to another. As long as they add up to your actual checking account, you’re fine.
I also have lots of accounts. Since all those other accounts are for recurrent expenses or saving for something specific, I only track the account for the household (daily) expenses (groceries, gas, eating out, etc).
I have my paycheck direct deposited into my main account where all my bills come out in autopay. Then I transfer my savings into the appropriate accounts (some are on auto-pay, but most aren’t). Then to my second account for discretionary spending like groceries, eating out, etc. I prefer to use the cash envelope method and that bank is closer to home. But I work weird hours, so if I don’t make it to the bank I know what card is just for those types of expenses. I track both separately on paper.
@Skyler
I wish the cash envelope system worked for us, but my husband refuses and the bank isn’t super close so it would almost be a hassle in itself. That’s why I switched to Capital One; you can make as many accounts as you want with 0 fees.
@Skyler
I didn’t know you could do that with CapitalOne. The credit union I use is literally inside the building I work in, and the bank is maybe 10 miles away, but I pass two on my way to and from my weekly appointments.
YNAB works well with multiple accounts and organizing bills and payments.
r/YNAB has a free trial over a month and lots of free videos online with helpful hints. Very useful even if you never pay for the YNAB subscription. Many in the subreddit say YNAB has been extremely helpful and ‘life-changing’ and worth the price. Helps to find/allocate dollars and pre-plan for inevitable expenses. Gives a free year to students.
Some considerations:
There’s a how-to when-to wiki at r/PersonalFinance and it’s helpful reading.
r/TheMoneyGuy has a financial order of operations.
r/DaveRamsey has a plan.
r/MrMoneyMustache has a savings rate chart and other good information.
Later progression of r/PovertyFiRe, r/LeanFiRe, r/CoastFiRe, r/FiRe, and also r/Retirement.
This one is actually super easy if you use the tool Fina (Fina Money) - the way they set up their categories is in 3 distinct sections of income, expenses, and transfers. Transfers are automatically omitted from any reporting. So if you have a credit card payment or money movement and it’s marked as a transfer category, it’s taken care of.