My “Banking” System

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?

8 thoughts on “My “Banking” System”

  1. Wow, I thought my kids were good at complicating things. They have nothing on you Dave! *grin*

    Just a question. If you rarely use your debit card, why not just pull money directly from your CIBC account?

    Also what do you buy online that is under $200? My last online purchase was about $380. Just wondering.


  2. We use PC Mastercard (and free grocery points about $20/month) and Savings, Chequing, ING as well. Will have to check into PC Line of Credit and Home Depot zero percent 6 months.
    We spend zero cents for any banking: savings, chequing, cheques, etc.
    For a downtown bank we’ve been using Canadian Western (they answer the phone with a live person and answer email; online banking and transfers and bill payments are instantaneous): we started when we had maturing GICs and their savings interest was higher than ING (but you need over $5000 for savings interest) and we got a CWB ATM/Debit Card for Costco till the Am Ex started, then found out you need to spend over $5000 on Am Ex before you get over 1%. We intend to end the Costco and Am Ex at the end of the first year.
    Canadian Western Bank has a branch in downtown Regina (their RRSPs have a scratch and win extra 1/8 up to I think 1 full percent).

  3. Like you, we were nervous about leaving the bricks-and-mortar bank because of the two or three times per year that we need US cash, a certified cheque or have a stash of rolled coin to cash in.

    But we did leave the bricks-and-mortar bank (and their fees). When we need a certified chq, foreign currency or someone to take our coin, we go to one of the banks that we have a credit card through (CIBC and BMO). We have also gone to the bank which is affiliated with our brokerage accounts. It’s been over two years and we have never had a problem dealing with them without a primary account.

  4. I have a similar setup but I use PCF chequing as my main account. For a bricks and mortar account, I have a basic account at Scotiabank where I get two free transactions per month (rarely used). But if I have rolled coins, or need a certified cheque, or US cash, etc. I go there.

    Whenever I travel to Europe I use the Scotia account as they have very good conenctions with other banks. Since I know in advance when I am vacation, I switch my account over to a ‘regular’ account with a $6 or $7 fee for that month and get all my foreign withdrawals covered.

    Works well and keeps bank fees to an absolute minimum – often $10 per year or less.

    I recently switched my online savings from ING to as well for the extra 0.8% interest. It adds up for no real inconvenience.

  5. Just 1 bank account, 1 credit card, 1 line of credit for me.

    I use my credit cards all the time, but I consider it a method of payment, not a financing tool. I pay it off right away.

    The line of credit has a balance unfortunately, but I’m working on getting rid of it as soon as possible. It’s also my emergency fund as I don’t believe in large emergency funds. Doesn’t make sense to me to have a large fund sitting there doing nothing.

    I use debit only when they don’t accept VISA.

    As for tracking the amounts, I do that on the computer and not by separate accounts. For example, vacation savings go into the LOC. It doesn’t make sense to earn 1% and pay 3.5% on the LOC. I put the money in the LOC, but track the amounts separately.

    Once I have more money to save, I’ll open up a higher interest savings account. Like I said now though, it makes more sense to pay less interest.

    Glad you found a system that works for you though.

  6. @ Tim: Once I wrote it out, it seemed pretty complicated – I guess I didn’t really notice because it’s kind of evolved that way over the years.

    CIBC charges fees every time I use my card, which I don’t like so I don’t use that for spending.

    I read a lot of blogs and listen to a ton of podcasts – over the past year or two I’ve started to donate a bit of money every once in a while to support the creators. It’s not a lot, no more then $5/month in total (I switch between sites every month), but I figure that if everyone donated $2 once in a while, it would really help the creator of the podcast/blog…..some of them have money processors that I don’t know so I figure I’d limit my liability.

    @ dlm – I like the idea of scratch and win for extra money – I’ve never seen that in Ontario.

    @ Dana – I get frustrated about CIBC’s fees every once in a while, especially since I really don’t ask them for a ton of service every month – thanks for the tips around the credit card accounts and using the banks.

    @ Robert – I’ll have to check out – might need to add another account at some point 🙂

    @ Financial Student – I’m trying to get up to 6 months expenses saved for an emergency fund, I just feel more comfortable having that for if me or my wife loses our job – it would take a lot of stress out of the situation vs. borrowing to make up shortfalls.

    Good luck on paying down your line of credit!

  7. It’s like shopping for food or anything — might as well try a new store for a better price.
    See Gail Vaz-Oxlade’s blog Jan 22 Entitled and Feb 8 Survey on Banks.
    One point for future use: CWB has good GIC RRSP rates but poor RIF policies: you cannot take a withdrawal the same year you convert to a GIC RIF; when you do, the interest is slashed — the red big bank allows immediate withdrawals of any amount and does not lower interest for GIC RIFs (but I have many issues with them and am looking for a better FI)

  8. Great post, Dave. Always interesting to read how non-rich others organize their financing.

    I have a similar setup but a bit more simplified (all with PC)
    – 1 checking
    – 1 line of credit (0 balance)
    – 1 credit card (always paid off – never paid interest)
    – multiple saving accounts for different purposes: vacations, annual RESP contributions, house renovations, car maintenance that could happen, etc.

    I recently consulted with Investors Group for some advice about maximizing savings for long and short-term goals: the interest on my PC savings is pathetic. I should at least use those new tax-free savings accounts, but IG thinks they can do better so I going to let them manage some short-term savings while I maintain a tax-free savings accoutn with PC – just to compare.

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