On Track Money Management System

Posted on: May 27, 2013

Our On Track Money Management System is designed to help you do two things: a) stay on track with monthly and annual expenses; and b) save for your goals.

The system goes back to the old days of putting money into envelopes to make sureenvelopes everything—from groceries to the gas bill—got paid. When payday rolled around, you’d put cash for groceries in one envelope, money for the bills in another, savings towards new clothes for school in yet another and so on.

To implement our system we suggest opening several bank accounts. Here’s what we recommend:

  1. One Main Chequing Account for fixed costs and regular monthly payments
  2. A Monthly Spending Account for things you tend to spend money on every month
  3. Several Savings accounts to save up for Lump Sum and Annual Expenses

The idea is to use different bank accounts to create ‘electronic’ envelopes—so the car insurance money gets saved and not spent on pedicures, the pigs 5account for university fees adds up instead of being drained by car repairs or other unexpected expenses. And the vacation budget, often a priority but usually the first to be sacrificed to overspending in other areas, gets stashed in an account labelled ‘Travel,’ safe from impulse shoe buying or unlimited lattes.

In effect, it doesn’t just give you a budget to follow, it forces you to limit your spending in each category to the amount you have in the account. If you’ve determined that it costs you $800 a month for groceries and by the third week you’re down to your last $60 in the Monthly Spending Account, no seeking solace in the credit card or pilfering other accounts. Get out the recipes and use up what’s left in the cupboard.

The payoff can be huge. And not just in terms of money, but of peace of mind.

(From UNSTUCK – How to Get out of Your Money Rut and Start Living the Life you Want by Money Coaches Canada co-founders Karin Mizgala and Sheila Walkington)



Category(s): Budgeting and Cash Flow
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