You'll need two checking accounts and one high-yield savings account, like the TCU Savers Club Money Market Account. First, figure out how much of every paycheck you want to put toward savings. Have that automatically sent to the savings account, which will fund your future goals (vacation, retirement, college fund, etc.).
Send the rest of your paycheck to checking account No. 1. You'll use this account to pay monthly fixed expenses, such as mortgage and utilities. These bills will be paid using Internet Bill Pay.
Figure out your monthly surplus in this account after your recurring bills, divide by four, and set up a weekly automatic transfer for that amount to checking account No. 2. This is for variable expenses like groceries, entertainment, and eating out. Two rules: You can't transfer more money over until the next week, and you can't use credit cards.
I think it depends. My taxes are rolled into my mortgage payment but I definitely think it's a good idea to budget for them, especially since they are usually a large amount whether you pay once or twice a year.
Posted by: Tony | July 07, 2009 at 05:30 PM
Do you count property taxes in the "Bills": bucket? That's a pretty hefty amount, tho I only pay it 2x year.
Posted by: scott | July 07, 2009 at 05:06 PM
Wow $50 a week! That's great! I do something similar and I am saving about $90 a month. I could probably save more if I could just cut out those "coffee house" splurges!
Posted by: Lara | June 10, 2009 at 03:14 PM
I currently use this method and it really works. I've increased the amount going into my savings account twice in the last 8 months. I started putting in $25 per month, but now I'm up to $50 per WEEK! I'd start out small and just keep increasing.
Posted by: TCU | June 10, 2009 at 08:45 AM