Are bank accounts like shoes?

"I find that it helps to break down the big picture into smaller achievable tasks and to recognise and celebrate these achievements along the way."
-Katherine Hann
March 31, 2015

Are bank accounts like shoes?

By Katherine Hann

Are bank accounts like shoes?

I promised to show you how to organise those 3 bank accounts and I wanted you to be able to relate this to something we all love.

Think about those 3 bank accounts like shoes, yes shoes!

So how do you organise your shoe cupboard? Or in this case your bank accounts?

1. Your every day bank account are your favourite pair of boots, you can use them every day, they are comfortable, durable and you know they will last forever.

All of your salary or wage is deposited into this account. It will not pay a high interest but it won’t cost you much to run.

2. Your bills account are your favourite pair of court shoes, you can wear them to work or out to dinner and they are reliable; 

you know exactly how they feel and they are there whenever you need them.

You need to work out what your regular bills are and how often you need to pay them.

The MoneySmart website has a fantastic budget calculator using an excel spread sheet.

It is easy to use and thinks of things you spend your money on that you may not have thought of yourself.

Work out your yearly bills and divide them by 26, put this money by automatic transfer into your bills account every fortnight when you get paid.

Here is the link, or you can find it on my resources page:

https://www.moneysmart.gov.au/tools-and-resources/calculators-and-apps#budgeting

3. Finally, your savings account is your favourite pair of sparkly, high heel shoes that you wear to that special event.

You don’t wear them often, sometimes they are uncomfortable but they give you exactly the look you want.

Remember that you want that new car! Pay yourself in savings first (again you can organise an automatic transfer with your bank).

Transfer between 5% and 10% of your salary to your savings account each fortnight.

If you are on a salary of $50,000 per annum, this will be $159 per fortnight.

If you can afford more, fantastic, you will reach your goal even faster!