My boyfriend and I have way too many bank accounts, but haven’t figured out how to remedy this yet.

Me:
Bank 1 – Chequing, Savings, TFSA, MasterCard
Bank 2 – RRSPs
Bank 3 – working out the details of a mortgage?
Bank 4 – Chequing

Him:
Bank 4 (again) – Chequing
Bank 5 – LOC, Savings

Us:
Bank 4 (again) – Joint account (for rent, utility bills, and car payments)

In the end it’s all about being aware. I use a computer program that uses the “jar” methodology. I usually have a rough idea of what I have for groceries, clothing, entertainment and random things. I definitely know when things are getting low.

Using cash is a pain. If you’re going to go for grocery shopping and other things you have to make sure you have enough cash on you. I just know what I can spend, and that’s that. Swipe the card (or tap it) and you’re good to go.

It’s also way easier to balance your budget when you have numbers online for your accounts then to go and count up your change.

If you have any sort of discipline I think cash is just a hassle.

If you’ve been in the mindset where you just bought whatever, swiped your card and forgot then I can see how having to use the cash could have a rehabilitating effect.

Just one other thing that you have said here before Gail but transferring a balance from a credit card to a secure line of credit might be okay under certain conditions, ie if you know you are not ever going to use the credit card but a financial representative suggests this to you because they know that most people will run up their credit card yet again. For the consumer, it just means bigger debt, for the financial institutions it means more interest.

There was only one disadvantage of cutting up my credit card last night. I went to work till 11:00 p.m. and expected to use my debit card to take out cash to pay for a taxi home. The bank’s website was down and I had to walk 20 minutes home. Walking in the dark after 11:00 p.m. gave me time to think and from here on in I will have a little emergency cash tucked away in my wallet.

I have four bank accounts. Maybe that’s a lot, I don’t know. I’d be curious to know what sort of bank account set up other people have too:

1) The Personal Savings Account (at a regular bank) – out of which I make all of my day to day transactions and into which I pay myself regularly out of the second account…

2) The Business Account (at the same regular bank) – I’m a sole proprietor and the only reason I got this account was so I could accept cheques in my company name. This is the account that grows and needs to be emptied regularly. (ie. money for longer term savings gets transferred into the third account…)

3) The Longer Term Savings (a virtual/online bank) – this account I opened in an effort to have a place to drop money that was less accessible to me. The bank is not my usual bank (noted above). It is virtual one (so I don’t have as much access to bank machines as I do with the other two accounts), plus I decided not to get cheques or an ATM card for this account. It is a place where money goes in (usually via electronic transfer from one of the other accounts) and doesn’t often come out. Under the auspices of this bank I have a regular savings account as well as a couple of term deposits. Every so often I’ll pull money out of this bank (ie. when a term deposit matures), and drop it into an RRSP at my financial advisor’s office (I guess you could call that the fourth account) where it will not be touched until I retire…

4) RRSPs/Investment Account – this fourth account is for stocks and bonds; more risky and/or long term investments.

I am really at the point where I could close the account at the virtual bank because I’m pretty good with my money and I don’t feel I necessarily need the added separation of that money from my day-to-day account. Also, from a paperwork point of view, I’d really like to have one less statement to keep track of especially as I can do all the same things I do at the virtual bank with my regular bank. Never hurts to experiment though. It’s your money afterall…do what’s right for you. It doesn’t cost you anything to start a new bank account, just don’t apply for a line of credit, credit cards, ATM card or cheques if you want this account to be primarily for incoming and not for outgoing.

I find with the credit card, I know I HAVE to pay it every month so I use it sparingly. I use is strickly for life necessities like gas and groceries. And there is nothing like paying for the whole month’s groceries in one lump sum for making you think harder about buying extras, like cookies! It hurts! BUT because I refuse to pay interest on these consumable items, it really does force me to make more thoughtful choices about what I am willing to put on that card. And to top it off — knowing that the big grocery bill is coming I tend to avoid other shopping all together!

That having been said, I suppose if I really didn’t connect the purchase with my immediate cash (if I let myself believe it was free for 21 days), I might be more loose with the plastic — especially if I thought I deserved the treat or it was a great deal or something.

I have thought about making a formal budget – but my fear is that if I have a certain amount allocated to clothing or other stuff I will feel obligated to spend it (even if I don’t need to). The way we do things I think about every purchase before I make it – do I really need it (most of the time I talk myself out of buying stuff). I know a lot of people who could use a formal budget – but for some reason our way works for us. I guess everybody relates to money differently.