Very few people love to budget and if you aren't one of them I don't blame you. While I generally enjoy budgeting now, it wasn't always the case. One thing that made budgeting for me way easier and more enjoyable was to use multiple checking accounts.
Checking Accounts for Expense Types
When budgeting you are looking at two types of expenses. First, fixed expenses where the amount is consistent every month, an example would be rent. Second, varied expenses, where the amount you spend changes from month to month, an example would be groceries.
Related: How to Save Money on Groceries
When I first decided to use multiple checking accounts to help me to budget, my idea was that I would use the second checking account to save up for big annual expenses, such as car insurance. However, what I found was that I was still not successfully sticking to my budgeted amounts for varied expenses. I was overspending, which is no bueno.
Enter, splitting the accounts for the types of expenses I have each month. Instead of a checking account to save for big expenses, I used separate savings account for those expenses and used the second checking account for my varied expenses.
Typically, the only varied expenses I have each month are for groceries, gas, and entertainment. By setting a budget for all three, I make sure that amount gets deposited into the second checking account. Voila, I have a limited amount of money I can spend on my varied expenses, ensuring I don't go over budget.
How Multiple Checking Accounts Makes Budgeting Easy
Having one checking account for my fixed expenses and one for my variable expenses has resulted in a lot less stress. For example, when I moved in 2015 I decided to hit pause on many of my money goals, like paying extra on my debt, the extra money that built up in my fixed expenses checking account stayed there. I didn't end up spending it on other things and then wondering where it went.
The hardest part of budgeting with multiple checking accounts was figuring out how much to budget. Hopefully, you have got that part down and are only struggling with sticking to your budget. If that isn't the case you can check out my post How to Budget Successfully Every time or look at using a tool like YNAB (You Need a Budget) Once I knew how much to budget I had to set up the checking account.
Choosing a Second Checking Account
If you don't already have a second checking account, then I recommend you shop around for one that offers you a bonus. Originally I chose CapitalOne 360 checking. I chose CapitalOne 360 for several reasons. First, it was a different bank from my regular checking. Second, it is fee-free with no minimum balance requirement and even gives you a free set of checks (for the rare occasion I need them). Third, it came with a $50 bonus. I have since moved on to using Chime.
I moved to Chime because it comes with a great automatic savings and bonus program. It rounds up each purchase and moves that spare change into a savings account. Right now it even gives you a double round up bonus on your savings.
So you've set up your second checking account for your varied expenses but still find yourself overspending, now what? Stop carrying around the debit card for your fixed expenses checking account.
Chances are you can make most of your fixed payments online (an exception maybe being your rent check). You don't need to carry that debit card around. If you are really worried about an emergency, then carry around an emergency credit card. But to keep yourself from reckless spending on the credit card, wrap it up in paper and tape so that you would be embarrassed to use it for anything other than an emergency.
Wrapping it Up with a Bow on Top
Having a second checking account for your varied expenses will help you stay on a budget without having to resort to a cash-only budget or the envelope system. Just remember that having a second checking account helps you to stay on budget but it doesn't replace the practice of budgeting.