Bank Account Folder
As we approach the new year our thoughts turn to our dreams and hopes and we naturally find ourselves delving into bank accounts, now looking a little lean from the boxing day sales, and we search for a way to maximise our savings.
I can remember as kid sitting with mum and dad when they would receive this pay packets, the ones with actual, real, hold-in-your-hand money, and helping distribute when the funds. Known as the envelope method, each envelope was named an expense i.e. Mortgage, Electricity, Phone, etc with the remaining money being put in the “hopefully” overflowing savings envelope. This way of budgeting was simple and effective, once you had covered your expenses you knew exactly how much fun money you have for the week.
These days with our spending obsession and the ever growing debt surrounding it, not to mention that we don’t deal with physical money anymore, it’s difficult to grasp that “fun” money. What if we could get that back without having to step back in time?
Put simply, the idea would be to have folders connected to your online bank account.
Okay, I know, you’ve just read that and thought thats not a new idea, I’ve been using (insert-budgeting-software-name-here) for years now and it does exactly that, however, we’re proposing that this folder system be integrated into online and phone banking.
Let’s say you get paid $1000 which gets put directly into your bank account. Nothing new here, this happens all over the world daily. Now, while you might use another program or spreadsheet to track your budget, there’s nothing that links directly to the funds in your account. So your spreadsheet might tell you that you have $500 budgeted for rent, $200 for utilities and $100 for groceries, but because there is no link between the spreadsheet and your account, what’s stopping you (besides will power) from over spending on non-budgeted items?
Now let’s try this again but instead of one account that your money sits in, you have one account with sub folders. These are personalised folders you can set up within your account to help reach your savings goals. Rather than having to open up multiple savings accounts for each major item your saving for, you can set up a Christmas folder, a holiday folders, even a car rego folder so you know that when the time times to pay that $750 car rego, the money is there already. You could set up automatic deposits into these folders, or manually move the money in the same way you would pay a bill.
To make sure you’re really in charge of your own money, you could set up withdrawal options, giving you the ability to choose the order your money gets withdrawn. Let’s say you’ve allocated your $1000 pay to your customised folders and you know you’ve got $50 fun money. You’re out having a great time, on your way home and oh no! You’re taxi bill comes to $55. No need to worry, you won’t need to transfer funds or go into a bank, the withdrawal options would allow you to nominate which folder your excess funds would come from, putting you in control of your money.
Your money, your way, wouldn’t that be nice.