Over the years, I have created a system of banking and spending that I thought I would share. It’s probably more complicated then it needs to be, but It works for me. I have 4 different bank accounts at 3 different financial institutions, as well as 3 credit cards and a line of credit. On top of these, my wife has 2 savings a chequing account and a credit card. Here’s what I use them all for:
My Bank Accounts:
“Big Bank” – Chequing Account (CIBC): This is my main account that I have my paycheques deposited to and any direct-bill payments made from. All of my accounts are linked through here. This account is also the only account that I pay fees on as well (approximately $5-$10 per month), which is the reason I have contemplated getting rid of it in the past. I have kept the account with the fees because from time to time it is convenient to have a “real” bank to go to – whether it’s for a certified cheque or a place to bring a grocery bag full of change to to deposit, I find myself actually talking to a teller about 3-5 times per year. In addition, the fees I pay are the only bank fees paid by our household as my spouse recently got rid of her “Big Bank” bank account in favour of an online account.
Online Saving Account (PC Financial): I use this for my emergency fund – it basically just sits accruing interest, hopefully never to be tapped.
Online Chequing Account (PC Financial): I rarely use a debit card, but when I have to(there are no other options) I use this account that has about $50 in it.
Online Savings Account (ING): This is the account I use for more long-term goals. In the past, I have used it for saving up for a car and for my wedding and honeymoon. Right now I’m putting aside a little bit of money each paycheque to fund my golfing habit for the summer.
I like to keep my savings split up (as opposed to Tim’s Super Fund) because it’s easier for me to see what I have to spend on things like golfing and other more personal expenses, as opposed to “Household” savings like the emergency fund.
My Credit Cards:
PC Financial Credit Card: This is the card I use for most purchases, from $2 and up (I don’t usually carry around any cash as I find I spend it much easier then using a credit card). I am probably one of PC Financial’s worst customers as I have probably cashed in around $500 in points and have paid $0 in interest.
CIBC Visa: This card has a very low ($200) limit on it that I use when I buy things online. I might be paranoid, but I don’t really trust some of the payment processors I see from a portion of online retailers.
Home Depot Credit Card: I like the do-not-pay for 6 months zero percent interest on this card. I don’t buy stuff unless I can pay for the purchase outright, but for cashflow purposes I’d rather take the 6 months to pay off what I’ve bought then front the money outright. I realize that making purchases like this is contrary to most personal finance wisdom. Most personal finance writers do not view credit cards favourably, but for larger (>$1,000) purchases I’d rather have the money in my account for 6 months earning interest then with Home Depot.
My Line of Credit: I have a $15,000 line of credit that I don’t use, but was offered when I signed up with PC Financial, so I took it. If necessary, I would use this to supplement my emergency fund, but can’t really see many situations that this would happen.
Other then the Home Depot card, I pay off my other spending credit cards biweekly when I am paid.
So, that is my system – writing it out makes it seem a lot more confusing then it actually is, but it’s what I use to keep my finances organized. I’m wondering how many different accounts and credit cards other people have and if you have a similar system of organization?