I was a cash only guy with only one bank account for many, many years and just tracked my budget on paper in a very loose fashion. Never really had any issues, but I wasn't the most disciplined when it came to maintaining a stricked budget. I'd have to finagle things sometimes when all my bills came due in the same payday cycle. (I get paid bi-weekly rather than semi-monthly which causes things to be off sometimes)
Last fall I started to get into the HYSA game and started using them as budget buckets. Let me tell you: it's change my whole thinking about budgeting. I now have 12 accounts between 5 banks that are each earmarked for a specific thing. Auto repairs, grocery, gas, clothing, summer camps, dinning out, wedding fund, charitable giving, etc. Each payday I send half of my monthly budget to that account right away. What is left in my hub account is my discretionary fund.
I did have to seed each bucket with a little cash from my emergency fund to start off, but now that they are all set up, I don't have to stress about how due dates align with my paydays. I'm currently half a month ahead in every budget area and will be a full month ahead come August. I get 3 pay checks 2 months each year and that "bonus" pay will put me a full month ahead.
Anyway, if you want a great method to improve your budgeting, bucket accounts might be something to try.
Cool that you found a system that works for you. Isn't it a bit of a headache to manage all of that (he said with a straight face, while holding a ~20-card hand in a CC forum)? Surely there's a decent HYSA out there that has this feature built-in! Do you ever do any rate management or not really?
@quickstep_knoll wrote:
Cool that you found a system that works for you. Isn't it a bit of a headache to manage all of that (he said with a straight face, while holding a ~20-card hand in a CC forum)? Surely there's a decent HYSA out there that has this feature built-in! Do you ever do any rate management or not really?
I have found it easier to manage actually. Maybe it's the way my mind works, but setting funds into different accounts helps me focus on and limit those things that I have to make a decision on. Example: let's say something pops in my head to do or buy. Before, I'd have to do some calculations in my head and try to figure out if I could/should afford it. I'd play mental gymnastics and say, "well, this isn't due until the 19th and I get paid on the 18th, so I could push this back and move this over here". Stuff like that. Now, when I get paid, I put a set amount in each bucket. Done. That money is spent and unavailable outside its bucketed purpose. If a decision comes up, I either look at that one bucket to see if there is anything in it or I look at my discretionary fund and see if there is anything in it. It actually brings clarity and simplicity to the decision.
There probably are banks that offer buckets in a single account (Ally does, I believe) but my setup isn't bad. I have 6 Capital One HYSA. Those funds are all geared toward things I'd use Savor or Venture to pay for. I have one AmEx HYSA which is only used for gas and groceries since BCP is my main card for those. I have a Huntington account for utilities since that is the only thing I use Voice for. And Fidelity has several accounts, but those are long term savings and very rarely get pulled from. Money goes in and sits. Or for things I write physical checks for. Yes, I'm old school and still like to write checks.
Rate management, like shopping for a new bank to get 0.1% or 0.2% more? No, I don't chase that. All my accounts are with banks I have credit cards with with the exception of Fidelity. However, the Fidelity Rewards Visa will be my next app once a few inqs and new accounts drop off.
Fair enough. Also, having multiple accounts at the same institution must simplify things a great deal compared to individual institutions for each. Thanks for explaining it, it's an interesting strategy. Truly the cash envelope strategy in digital form.
Yeah, I probably should have put Savings Buckets in the title.
I can't edit the OP, but is there a Mod that can add that to the title? Not sure who the Mods are on MF.
