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Complicating the System to Keep it Simple

I just made a major change to my financial plan that should, after the initial confusion, make managing my finances a lot easier.

I start my part time job in April. Because I won’t have a set salary, my extra income will fluctuate depending on how many hours I bill for therapy. To complicate matters, the money will be added to my existing paychecks because I’m working for the same company in my full time job.

So I opened an Electric Orange checking account through ING Direct. No, I haven’t fallen out of love with PNC Virtual Wallet. But I do have concerns about what this extra money will do to my budget. I can’t really plan for it since the amount will be different each pay period. With my history, that puts me at risk for spending and/or wasting every dime of the money because it’s “extra” or unaccounted for.

The new checking account will serve as my “fluff” money. I’ll deposit a set amount each payday (I’m thinking $200) to spend on random stuff like books, gifts, clothing, restaurants, and going out. Everything else above my normal $1075 pay will go into savings in my Virtual Wallet account. I’ll still use my VW checking for bills, groceries, and gas. My budget categories for restaurants/miscellaneous will go away.

There are several reasons why this is a good idea. First, I’ll be able to separate optional spending from the money I use to pay for important stuff. No cutting it close when a bill is due. Second, I’ll be able to limit my fluff spending to what’s in the new account, so I won’t have to budget as closely for random things I buy. Third, and most important, I’m giving my extra income a purpose so I don’t waste it all.

I know some people are probably thinking, why not just save all the money? Believe me, I thought the same thing. But the money I save right now goes into my emergency fund, and I refuse to move it out for a non-emergency. If I start that, every bit of the money I’ve saved will be gone. Opening another bank account is purely psychological for me – I need to be able to spend a little, but in a controlled way. When that money is gone, the Electric Orange debit card will be put away until I get paid again. No more random spending from my VW account and potentially messing up something important.

It will take awhile for the new system to start, so I won’t be able to judge its effectiveness for a few months. I feel good about my decision, though it will be a headache until I have the routine set up. I especially like the $50 bonus coming my way after I use the new debit card three times! I’ll keep you all updated.

About Andrea Whitmer

Andrea is a freelance web developer and mom trying to maintain a sense of humor in an otherwise chaotic world. She blogs in hopes of helping others avoid the same mistakes she made in the past. Join in the discussion here on So Over This, or connect on Twitter, Pinterest, Instagram, or Google Plus. You can also subscribe to new posts via RSS so you never miss out!


  1. frugalforties says

    I actually have a very similar system myself. I have my paycheck split into 2 checking accounts: $300 goes to my "personal" account and the balance of the check, whatever it is after IRA and taxes and so forth, goes into my "bills" account. I also have a very low limit credit card ($200) that I use for most of my personal spending. Every payday I pay off the cc out of my "personal" account. I can also draw cash from that account for those situations where I can't or shouldn't use my credit card. I've found it helps me a lot to actually physically separate my personal spending from my regular bills. It's really just mental/psychological, but that barrier of "this is the account I pay my bills from" really helps me to not spend extra money. It's also allowed me to build up a little bit of a buffer in my "bills" account so that I don't run the risk of missing an automated transaction somewhere.

  2. Wow, I'm so glad to know someone else is using a similar method to keep things organized. I'm also glad to know it's working for you! I really hope I'll be able to spend money more wisely this way.

  3. Julie @ The Family C says

    I love your plan. I'm a big believer is assigning income to different things, like you've done.I also love the name of your blog. When I saw it I had to click through to check it out.

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