How to Budget With Multiple Bank Accounts | 605

0:01Currently my budget for free trail says that I have$2 ,096 spare. Promise you I do not have$2 ,096 spare.

0:10Melanie Lockert:If we did that right now, I guarantee we would find$2 ,000 of spending. But the number one thing like I said that you need to do is separate the spending. And I'm going to patent a button. When you push by now, it says asking your wife and I can deny it. How many months are in the rest of your life? Yeah, a lot. So it's worth it to take the time to get the messy middle taken care of, swap it all over, you get done, and then you have all of it. Do you make good money but have nothing to show for it? Are you tired of living paycheck to paycheck? Do you have big dreams for your financial future? Do you want to get debt free, but you don't want to live on beans and rice?

0:47Melanie Lockert:Or you don't want to give up those pumpkin spice lattes? If you don't already know how to budget, or if you're using credit cards to get through the month. If you want to seem like you have your finances all together, or you're not on the same page with your spouse when it comes to finances. We know what you're doing probably isn't working, but guess what? You're in the right place. We're Shana and Vanessa. We're best friends, business partners, and master financial coaches trained by Dave Ramsey. We've been in business since 2019, helping hundreds of amazing people like you create budgets, get out of debt, stop living paycheck to paycheck, and know exactly what to do with their money.

1:21Melanie Lockert:In this podcast, we'll share with you everything we know plus everything we're working on with our clients so that you have the best chance at reaching your financial goals. We want to help you take the guesswork out of your budget, improve your marriages, and even bring your kids in on the conversation. We can help you no matter where you're at, whether you're the single mom who's never had$500 in her savings account or the millionaire who's paid off four real estate mortgages. And we're not going to shy away from the tough love. We'll tell you what you need to hear and encourage you at the same time.

1:48This is the Financial Coaching for Women podcast. Melissa, thank you so much for coming on Financial Coaching for Women. We're so excited for this live call. So tell us what brings you to the call today and how can we help? So the biggest thing that I struggled with, I think when I was scheduling was having all of this quote unquote spare money that I know is not true. Currently my budget for February says that I have$2 ,096 spare. Promise you I do not have$2 ,096 spare. So that's the biggest thing that I struggle with. I put everything out that I believe is coming out. Obviously, maybe I underestimate like I tried to put out my groceries.

2:33And I don't know if again, if I'm underestimating entertainment out to eat those types of things. Yeah, but that's definitely something wrong. Have you separated accounts yet? yes partially i should say so i do have a separate account for bills okay but that debit card is still in my wallet we won't talk about that oh that's all done ball is over that's it that's the problem

3:01Melanie Lockert:so when you say that there's money left over but you there's not what do you mean what do you really mean so when i'm like looking at my account in general the i have two accounts that are fully intentional to be one is supposed to be gas and groceries. And then we have our bills account. And then I had initially started an account that had a ridiculous monthly fee that I ended up closing because of that. And so I hadn't opened another account specifically for that, but I would like to do the spend account as well. I just started a business too. Things are a little bit wild, but on top of that, it's mainly go into my account.

3:40And like I said, at the end of my month, it looks like 2000. And then I go in to pay something extra or I can put more on this credit card or that credit card. And it's, that's overdrafted or something crazy. So you're still spending out of the bills account. Yeah. Because the only thing you have separated is your gas and groceries currently pretty much. Yes.

4:01Melanie Lockert:No, no, no. Okay. I want to, if you were our client, we would solve this real quick. So I'll tell you what we would do. We would go, okay, well, listen, love you so much. Let's go log into that bills account and let's just start. let's start today. We'll work our way backwards to the beginning of April. Cause we're talking, we're recording this in April and we'll just see everything that happened in the bills account. That wasn't on the budget. Oh no. And then we would run out of lines. Love you so much. We would run out of lines. And the reason I'm saying this in a funny way is because we've done it so many times and it's, it really is.

4:28Melanie Lockert:This is the reason that we want everything separate. We want that bills debit card, which is a hard habit to break. We get it, but that's why you have a spending card. And as soon as you do that, because if we did that right now, I guarantee we would find$2 ,000 of spending. And I'm not necessarily, it wouldn't necessarily, oh, it might be dry cleaning. It might be this or whatever. It's just stuff that's not planned correctly. And that's why it's the discrepancy is there. And if you can only have two checking accounts because of your bank, first of all, get another bank or find a credit union, go shopping.

4:57So there are banks out there, credit unions that will allow you to have multiple accounts for zero fee. So that may be what you need to do. But the second thing is if you're, if you don't want to do that, the only other solution here is ixnay the gas and groceries account and make that a spending total spending account and so whatever you have added up on your spending so gas groceries family entertainment dog meds chickens love that and then zero you don't have anything on the rest of it but whatever else it's filled out add that total up that gets put over to the spending account and that is what you use throughout the month to spend with and that's what you have to prioritize and you're going to get to the point where you hate that because it's again not categories it's not put into each list this is gas and groceries.

5:37This is for me. This is for the kids or whatever that looks like. And you're going to want to break it down even further. You're going to want more accounts. We see it all the time, but you're spending out of the bills account. That's exactly why it's not working or because you're saying there's supposedly$2 ,000. Now you have to track. So in order for you to make sure this is working, you now have to become a bookkeeper and go back in every single transaction that happens throughout the month. You have to know where everything's going. We don't have time for that. Yeah, for sure. Yeah. And I think the struggle with switching because it is frustrating.

6:05My main credit union that we use in our area is only allows you to have one account per primary person. I can have one and my husband can have one. So we can have two, but that's it. And so I don't like that. But my husband and myself, we both have multiple employers that deposit into our account. So the idea, I need to just do it. I just need to just buckle down and do it. But getting the direct deposits all switched is like, It's the messy middle.

6:31Melanie Lockert:It is, but let's break this down. Okay. So a lot of times we will give clients some grace period, but the first thing that you need to do is separate the spending. And even if you open, get that separated, like Vanessa said, even if you're just doing the one account or you start with your spending accounts in the new bank, just to see that I like this bank it's working. And then you're doing the transfers over there for every spending account. That's step one. And then the second step is to move all the bills and direct deposits over to that same bank. But either way, it's going to take a minute, but it's not, it's actually not, it'll take an afternoon.

7:07Melanie Lockert:You need to go ask all of your direct deposit people, and then you're going to ask, move all your bills. And then guess what? You're done. For the rest of your life, the budget's done. It is a little bit of a time investment, but it's going to, you need to have that extra$2 ,000 and you want to be showing it where to go. And if your bank is not going to allow you to use a system that's going to make that super easy for you. Bye. Yeah. Even if let's just say you have a busy month, kids work, whatever, it takes you one month to get this all set up. How many months are in the rest of your life? Yeah.

7:37Yeah. A lot. So it's worth it to take the time to get the messy middle taken care of, swap it all over, get done. And then you have all of this automated up for the rest of your life. You don't have to touch it.

7:48Melanie Lockert:And here's what I'm, here's what I'm looking at. Yes. You guys have several paychecks, which is fantastic. But you, if you really look at this, it's probably no more than 20, 25 bills that you have to, which is, it's not a small amount, but it's not that many either. So that, and then if you get that card, you sit down and just do it all in one fell swoop. Once you have a new account and a new card. So that is the first step. You have to get all of that. You want to have that card that, that bills debit card in your possession in case some of these people don't take accounts. So get it all set up.

8:16Melanie Lockert:You can start with moving the spending over if as soon as you get that new bank figured out whichever one you want and then you can slowly move the bills over or not slowly but you take your time doing that and along with the paychecks and it can be a process but the number one thing like when i said that you need to do is separate the spending i would go back in there one time not that we love this for you no tracking but i would go back in that bills account and see what else is coming out that you didn't put in your budget because again it's not always like oh i went to nordstrom or whatever that's not usually what it is.

8:45Melanie Lockert:It's like, I forgot that we paid dry cleaning. I forgot about the lunches, the kid lunch account that comes out. It's all these different things that you got a lot of stuff on the budget, but you didn't get it all. And that's what we want you to get that bills account really figured out. I had a client and we, she gave me her budget and she said, all right, everything's up there. It's already updated. I was like, okay, let's go line by line from the first. And when she, and then I found, we probably found like 10 transactions that she didn't put in the budget. Cause she's like, I don't understand why it's not adding up.

9:09And I was like, this isn't why, this is why it's not adding up. It's because all these extra transactions in your bills account that weren't supposed to be there are not accounted for. So when you make your budget, if you look at your income section, you're saying with all of this money, we're doing all of this with it. So if you're doing stuff with it that you didn't account for, then it's, then that's why it's not going to add up. Right. Yeah. And I separated from the beginning when I first started with you guys and I first got the budget system and everything I started with separating. The first thing was my son's tuition, school tuition is school tuition transfers out of my bill account straight to his school tuition.

9:41And there was like a 75 extra per transfer. Cause that also covers his lunches. So then when his lunch money needs reimbursed, I'm there. So I'm like, and then the other reason that I switched from besides the annoying fees was the two to three business day take forever to transfer money when it's an external account. And if I need that spending money to be in that spending account on Friday for gas or whatever, and it wasn't, It was in there Tuesday. And so then I would have to wait or I'd have to pull out a bills account, which is extra. And it was just this giant mess. So still working on trying to get, like I said, a completely different bank and also getting my husband on board with not using the bank he's used all of his life, because that's the one that's in our area.

10:24We have a podcast about that. And I'm going to patent a button that when you push by now, it says asking your wife and I can deny it. I'm going to bat it.

10:37Melanie Lockert:Sends a message. This is why it's so important for him to get a spending account. And also, if it's so important to him, he can keep a spending account there. You can keep that one that he has at the stake for the rest of his life, if that's what he wants and move everything else that he can have access to and he can be a part of. But if he doesn't, because sometimes it is a little harder to get them to come along. And so we want to work with them. We have to make it as easy as possible. Make it as easy and painless as possible. And then usually they'll come along anyway. eventually he'll be like, this is dumb that I have, I'm in this bank by myself.

11:06Melanie Lockert:Let's all, let me move over there with you or whatever. So you can take those shortcuts. What I want to say is the simplicity and clarity that you have for your son's tuition and lunches coming out of the one account is what you're going to have for everything. As soon as you go all in all that, I remember telling my client, you have to rip the bandaid. You're half, you're have one toe in the water and you're like, this is, I don't know. But once you get in, it's really going to make a difference. It's going to make a huge difference for you to get it all working the way it's supposed to work.

11:32Yeah. We have a lot of people that are tiptoeing and they're half in half out because they're just not sure. And, or they don't trust themselves. Not really that they don't trust the system. They don't trust themselves because it's something new and it's uncomfortable. It takes them out of their comfort zone, all of that. But we would really tell you to just jump in, like Shana said, and just get a shot, find a bank that works and does everything that you want it to do. Cause you remember you're in charge, you're giving them your money. So they need to be doing what you want them to do in order for you to stay there.

11:59Absolutely.

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12:52Melanie Lockert:Six months from now you'll wish you started today. And then the other thing that you said about the delay with the transfers, it's only going to be delayed one time. Okay. So like when you were annoyed and it didn't get there until Tuesday, but now your new time of spending, your time interval of spending is on Tuesday, right? And so every Tuesday you're going to get replenished or every two Tuesdays, whatever, however you have it, that annoying three-day delay, as long as you get it set up now, that same interval two weeks is going to be the same now, right? So it is annoying the first time. But after that, you still have to last two weeks on whatever spending money that you gave yourself.

13:26Melanie Lockert:Right. So it's just a one-time annoying thing. And then once you get everything moved over to the bank, to the one bank, none of that will happen in an instant. Yeah. I think one last thing I struggle with is like one week we get paid like a wonderful week because my son, my husband and I get paid. And then one week it's only his paycheck and then it's all of ours. So it goes sporadic. And so it's kind of like getting down to that number on how much to transfer on which Friday, because obviously we have technically, I don't know, more spending money. You know what I mean? No, I know what you're saying, but you're, so that's not, yes, we're going to help you with that too.

14:01Okay. Go ahead. It's just, you want to pick a pay cycle. So if you want to do weekly transfers, you do weekly transfers for the exact, it doesn't matter if your gas and grocery budget is$1 ,600, you're going to take that divided by four and you're doing the exact same amount of, like the exact amount for four

14:17Melanie Lockert:weeks. Yeah. Does that make sense? So that's why we're budgeting monthly guys. We're seeing how much money do I bring in a month? Like Vanessa said, and I'm going to sign that what to do when the paychecks drop is almost irrelevant to us. Why that is why we want to get a paycheck ahead because it can get a little wonky if we don't get a paycheck ahead, but you have this 2000 that you're going to figure out where it is. And it's going to say that's going to be your new buffer. So you never have to do this kind of thinking again. But one thing that we do recommend, you can do a weekly. Vanessa's very used to weekly.

14:46Melanie Lockert:That's her way of doing it. You, you have two larger paychecks every two weeks or whatever. You can also just do it on those paychecks because there's more money being deposited and you can choose to do that. But either way, what you're going to do is you would take those amounts that you budget, you go look in your paycheck plan and it says two, how many times do I want to do these transfers? And you do two and you just set it on those days and you forget it. You get that$2 ,000 that's in your budget. You get that ahead and you don't have to worry about when, where, why, how, who, right? It would be easier just to do it on your pay cycle.

15:16And then you set up the transfers to happen on that. Whenever you get paid, if it's every other Friday or if it's the 10th and 25th of the month or whatever that looks like, and it never changes. And it's only based on your pay cycle. And then your husband's checks are just being deposited. It doesn't, it's irrelevant when they drop. If you have multiple coming in, just pick the ones that you want to use to make your spending transfers. Okay. I see. So when I then divide, let's say I'm going to budget$1 ,000 for spending for the month, then I would just do two$500 transfers to the spending account instead of four.

15:48Yeah, it would be easier to do. Do you get paid twice a month or every other week? Every other week. Yeah. So then there'll be twice a year where you'll get actual, your budget will be a six-week budget. Okay. Because you'll have to account for those third paychecks. You'll actually get two times a year, you'll have a true three paycheck budget. and you'll have to account for spending the extra two weeks. But the automatic transfers into those spending accounts will be set up because you'll have that number already done and it'll be reoccurring. Right? Okay. So yeah, just do it on your pay cycle.

16:22Your intentions are to get ahead enough to where you're not waiting for the transfer. There's already money in there. You just are replenishing it essentially. So your paycheck that comes in at the end of April, if you don't need that for April, I would save it to put it towards March and May. When you make May's budget, that paycheck for you is the first one of the month. Yeah. And I, yeah, I had started that. Like when I first started the whole budget system, I was doing better with making it that way. And I've fallen off and gone back to, you know, it's a falling off. But another big thing was all of my autos, all the A's next to the bills there and the other ones, those mean auto.

16:59And those were not there at all when I first started. I'm so proud of that. Because it is. At first I was like, I like to have a piece of paper and I want to pay it, but then I have to remember and I don't remember. And so that has been really nice to make that change because I don't have to worry about it coming out. And as long as I keep that, that bill's account, like it should be, the money's always there and it just comes out and I don't even have to think about it.

17:22Melanie Lockert:Yeah. Yeah, absolutely. And that, that is, again, that's like, okay, fine. I'll give you like three toes in the water. Cause if you, that is a big part of it is I'm no longer micromanaging and having to be all up in this. My bills are coming out automatically because I have the money in there automatically. That's great. You have that bills account. You have that set up. The next step is to get it all the rest of it so that you can actually feel the full relief of the system. And I will say getting that husband. So I'm still thinking about, I'm going to think about the patent that you're going to get about the buy now, but did you ask your wife or whatever?

17:49Melanie Lockert:Get your wife. Marketplace do both of them. But having his own spending account is basically that that's what it's going to be because he's going to be spending from that as, and we're going to take the debit, the bills debit card out of any buy nows. And that will be the first start of that sort of accountability. And then all, and here's what we, once he's looking at it all with you and you guys are really on board and you're meeting, meeting your goals and paying off debt and all that, he, you can start them with as big or small spending budget as you want. Right. And I noticed that's not in the budget.

18:20Melanie Lockert:So that's part of the problem. So that's a giant number that probably should be there. Huh? It's probably half of what's left over to be honest. It is, it is. And that's where it's all going. But, but just like all of us are going to be better when we have some sort of guardrail naturally. So if it's 500 bucks that he has a month or whatever you guys decide, it doesn't like, let's be realistic. If all of the leftover is truly him spending, which I doubt it is, but if it is, let's not say, okay, now you're going to live on$20 a week. Good luck. We're not going to do that. Okay. We're going to give them a good, healthy spending budget and let the The system works on you emotionally and all of that all by itself.