The Money Hack that Saved Christmas!
One of the best pieces of advice I ever received about handling my money revolved around the idea of opening up a second bank account. The first account would be used for “everyday” expenses like food, gas, rent, and bills, while the second account would be used for less frequent (hopefully) purchases like car repairs, Christmas presents, and vacations.
The way this two-account hack works is everytime payday hits, you immediately set aside a predetermined amount for the second bank account. The trick is, you have to transfer the money over immediately, so it feels like you never really had it to begin with. Like we’ve mentioned countless times before, finance isn’t just about crunching numbers; it’s a mind game too. We don’t want saving to feel like taking.
This will come in extremely handy around the Christmas season. No more maxing out all of your credit cards and going into debt just to get the people you love a nice present. Decide how much you would like to spend come Christmas time, divide that number by 12. Then, save that much money every paycheck. Whenever December rolls around, you just dip into your second account and your “regular” bank account doesn’t even take a hit.
This division in long-term and short-term expenses also makes budgeting that much easier. If done correctly, you’ll see your second account grow larger and larger. Here are a few more ideas for things you can save for in your second account: emergency fund, furniture replacement, vehicle repairs, doctor’s appointments, clothing, vacation, entertainment, subscription dues, and countless other options.
Our aim with much of the advice we give here at The Money Dojo is to allow you to take control of your finances, without feeling like you’re missing out on life. A lot of our tips require planning and precise budgeting, but when executed correctly, they create a higher level of financial freedom. Keep chipping away and check back often for more tips, tricks, and advice from the Dojo!
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