In working with clients, we have found this trick to be super helpful and provide additional peace of mind.

We all have non recurring expenses that happen randomly or every now and then. Some examples include, travel, home repair, car repair, medical, gifts, insurance premiums, etc. These can cause stress because they don’t happen on a regular basis, and they can be quite large. But, they will happen and we need to prepare for them.

We recommend savings subaccounts. Here’s what you do…

  • Open a separate savings account at your bank (this has become much easier with online banking)
  • Name the account and set up an automatic transfer from your checking each month
  • When you incur an expense in that category, transfer money from the savings account into your checking and pay the bill

My wife and I agree that this is one of the most helpful things that we do with our money. We use Capital One but there are other good options out there.

Let us know if we can help with this!

Posted in Budget, Financial Planning, Saving

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