Adulting 101

The Power of Multiple Bank Accounts

Let me break down this totally amazing trick that will save you from financial anxiety. 

My biggest anxiety when it came to adulting was paying my bills. I had my car payment, car insurance, cell phone bill, student loans, and my monthly wine subscription (you know… the basics). I didn’t know when my bills were due or how much I needed to pay. Worst of all – I didn’t know how much money I actually had in my bank account to spend while still having enough money to pay my bills.

Then I thought of this perfect idea – not an original idea but I like to take credit: two bank accounts!! Not one, not three but two whole bank accounts. “But Jeremias, why do I need two bank accounts? What’s next, two cell phones?” Let me break down this totally amazing trick that will save you from financial anxiety.

The Dark Void Bank Account

The first bank account you’ll need is the dark void bank account. This is where money goes in and never comes out (well it goes out but only to pay bills).

  1. Open a new bank account and put a decent amount of money in there to cover one month of bills.
  2. Calculate your monthly reoccurring bills (rent, car payment, car insurance, student loans, cell phone bill, gym membership that you probably never use, Spotify subscription, etc.)
  3. Sign up for automatic payments for each of these bills and have them taken out of the new bank account.
  4. Ask your employer to split the direct deposit from your existing bank account to the new bank account. Put enough money in each month to cover all your bills and a little bit for cushion.

If done correctly you’ll never have to worry about bills again! Money will automatically be deposited into your new account and automatically transfer out to pay bills. It’s honestly magic!

The Party Bank Account

Now that you have one bank account that automatically handles all your finances you’re ready to enjoy your party bank account. Most likely half of your paycheck will go to the dark void bank account but the other half (or quarter) will be deposited into the fun account.

Essentially, you can spend everything in this account and still have a place to live, a car to drive, and some ramen noodles in your kitchen cabinet. Use this account for food, fun, and festivities.

  • No longer worry if you can afford to go out with friends!
  • No longer guess if you have enough to cover bills!
  • No longer overdraft your account because you forgot you scheduled a bill!

Third Account (For Advance Adulting Only)

Once you have a handle of your finances you can think about adding a third account. This is your emergency fund account incase something crazy happens.

  1. Open a money market account (usually a minimum dollar amount needed).
  2. Schedule automatic deposits like you would any other bill.
  3. Let the money grow until it covers 2 to 3 months of expenses.

Knowing you have enough money to pay 2 or 3 months of living expenses feels great, especially if you fear getting fired. Knowing you’ll earn more money in interest than a traditional bank account is also pretty awesome.

This third account is great especially for preserving your retirement savings. The first thing people do when they lose their job is take money out of their 401k. Not only is this money taxable but it also comes with a 10% early withdrawal penalty for individuals under 59 and 1/2.

Adulting For The Win

Follow these easy steps and you too can be on your way to financial freedom. It might take some time to set up your new account and schedule all your automatic payments but in the end it’s worth it. Never have to worry about paying bills again and never have to stress about accidentally spending your rent money.

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