Recently I was doing some money coaching with my boyfriend. It’s always luxurious to do coaching in front of a fire in a cozy living room, but besides that, it looked like many of my coaching sessions. Well, I did have a glass of wine in my hand.

We were talking about his multiple accounts- and how they were not quite working for him. He kept a lot of money in one checking account and transferred money as he needed it into a second checking account that he spent out of it.  He liked seeing a large balance in the first checking account, but it wasn’t particularly organized. And he often hesitated, unsure if he should pull the trigger on a larger project. Lucky for him, he was dating a money coach.

One of the things I (strongly) suggested was that he use only ONE checking account, not two. Nothing crazy about that idea, though it would streamline his finances a bit and cut down on transferring money around to cover things.

Having two or more checking accounts generally causes havoc and money fog for most people, regardless of how many credit cards or savings accounts one has.

(Your savings and credit cards should be connected to this ONE checking account.)

But what I want to share with you was our savings conversation.

I explained to him that part of why he wasn’t feeling particularly secure was that the large chunk of money in his checking account was functioning partly as his safety net (if he left his job and had no money coming in) and partly for large projects (like rebuilding his beloved motorcycle and replacing his wood stove) and partly for boring bills and monthly spending. It was all mixed.

I recommend he have ONE checking account and TWO savings accounts.

I had him name one savings account “Safety Net”. He loved the sound of “Safety Net”- it made good sense to him. He put three months of expenses in there and LEFT IT ALONE. (Many of my clients like to call it “Freedom Fund”.) Done. Don’t touch it. Stop transferring money in and out of it.  If anything happened to his job, he was covered for a few months.

He already felt better.

Then he named his other savings account “Project Savings”. This is a name we brainstormed together. Many of my clients know I use the term “Periodic Savings” for periodic expenses, but my guy liked the term “project savings” better. Words are powerful and you have to resonate with what you name things. So great by me! This savings account is for both the unexpected (like car repair and leaky pipes) and for the expected, like vacations and Christmas. Some finance people call this your emergency savings. I never like this because some of these “emergencies” are fun- like going to Hawaii for a week. They are simply non-monthly.

But good or bad, these kinds of expenses are the bigger financial “hits” that stress him, and everyone else. He didn’t want to carry a balance on his credit card for these things, but he always felt bad when he pulled money out of his large checking account to pay them off. It felt like the “safety net” part of his money went up and down, and this didn’t feel good.

So, we got into his online banking interface and named his second savings account, “Project Savings”. I had him set up an auto transfer from his now single primary checking account to this account each month, of approximately $1,000. We debated the amount and changed it several times, as his list of “projects” grew. He knew he could pull the money out of this account whenever a “project” appeared.

My guy makes good money. He can always cover normal monthly expenses. But when he has a big project, he likes knowing now there is dedicated money for it that he can pull from—and this does not affect his safety net, which is now totally separate. He loves knowing he is saving up for these projects. His project list:

• Attending the national tango competition in California (with me!)
• Doing a mini-kitchen refresh and replacing some of his appliances
• Dental work beyond just maintenance work
• New wood stove in his living room

Here are examples of projects that my clients have on their own lists:

• New living room furniture project
• The breast reduction project
• Kids summer camp project
• Build a chicken coop in the backyard project
• Landscaping project
• European vacation project

What about you? What is your own list of “projects”? Consider a dedicated savings account for these periodic expenses, that is separate from your safety net and retirement accounts.

Saving money every month into a savings account such as this makes a HUGE difference in how you feel about money.  It also keeps you out of credit card debt.

Less stress and anxiety mean more time and space to enjoy life.

Here’s to a cozy fire, another glass of wine and a few grateful hugs from my boyfriend.

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