Your bank accounts: did you know they are the key to your financial success or failure? We’re not kidding! Setting up their Perfect Account Structures positioned these seven Financially Fit Bootcamp Certified Coaches to take control of their money rather than letting it control them. Here are their stories:
Haphazard Account Structure Causes Money Stress
Larry Malone’s existing account structure was causing some serious nail biting. He and his wife, and his high school and college-aged children were using one checking account to pay for everything from dorm life necessities to gassing up their vehicles. Larry checked his accounts three to four times a day to make sure no one had overdrawn the account.
At the time Linda Emslie learned about the Perfect Account Structure, there was a lot of confusion around how she had set up her family’s accounts. This structure was actually one of the contributing factors to why she and her husband were struggling a bit financially. When she reached the Perfect Account Structure module in Financially Fit Bootcamp, she felt overwhelmed by all the information—and the disconnect between where she was and Financial Freedom. As it turns out, the Perfect Account Structure gave her the clarity she needed.
“I [could] see the value of doing this, but how do I get there? How do I get from this is what I’ve got to this is what will work for me. The appeal for me in the Perfect Account Structure was the clarity that it provided for me.”
Before he set up his Perfect Account Structure, Michael Tandean felt like he was getting nowhere financially. He was in a rat race to get ahead, but he couldn’t because his existing accounts were creating confusion.
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“I had three different bank accounts,” Michael said, “and my money was a mess, causing great money stress. Since I was mainly shifting money based on current circumstances, it felt like I was getting nowhere.”
Even Financial Professionals Need A Perfect Account Structure
Prior to setting up the Perfect Account Structure, Wendy Priester, an accountant, recalls obsessively looking at her checking account to make sure she had enough cash on hand to pay her bills and purchase what she needed or wanted. She had no Freedom. Even though her career is in finance, constantly doing the math to make sure she was covered was no fun.
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“It just took up a lot of time that I would have rather spent doing something else,” Wendy said. “So for me, setting up this perfect account structure was really freeing, and it really changed my life. It gave me my time back.”
Vikki Morgan, like Wendy, also had a career in finance and considered herself good at money. While she did have some systems in place, after working through the Perfect Account Structure module, she realized the way she was managing her family’s money was designed to keep them poor.
Whenever they needed money beyond what was in their checking account, she would tap into their personal savings or her business savings. This was especially true for big ticket items like vacations or car repairs. At the end of the month, she often didn’t know if she would have enough left over to meet her business’s needs.
Andrew Woodward, a financial education expert, calls his previous money management “haphazard.” While he had several bank accounts for different purposes, he hadn’t automated any of them. He was constantly transferring money to meet his various needs.
A Simple Process
For each of these Financially Fit Bootcamp coaches, setting up the Perfect Account Structure proved easier than it initially seemed. Larry, for example, set up separate Everyday Accounts for each of his children and his wife. He also set up accounts for recurring expenses and another for special expenses like vacations or gifts. The most important account was his Pay Yourself First account. As soon as his paycheck comes in, the system automatically deposits his Pay Yourself First amount straight off the top of his income.
Wendy initially thought the process would be difficult, but when she looked at her existing accounts, she realized she already had many of the right pieces in play, she just wasn’t using them correctly.
She had several savings accounts already in place that she now uses for recurring and surprise expenses. A savings account at an out-of-state bank is her Pay Yourself First account. This account is difficult to access, so she’s not tempted to withdraw money. The only account she opened is a checking account she uses as her Everyday Account. She turned her existing checking account into her Income Account.
When Susan Whelan set up her Perfect Account Structure, there was a little more work and planning, but the rewards far surpassed the amount of effort she put in. She had four existing accounts: three savings and one checking. The checking account is her Income Account but is inaccessible by card. She opened two more checking accounts as Everyday Accounts for her partner and herself.
From there, her existing savings accounts are now a Goals Account, Surprise Account and an Education Account. Three accounts at a different bank are her Pay Yourself First, Emergency Buffer and Debt Termination Accounts. After that, she focused on automation.
Reaping The Benefits
For these Certified Coaches, setting up their Perfect Account Structures proved to be incredibly rewarding. Vikki no longer raids her business account for money. Now she has the power to choose where and when she spends money. And neither she nor her family feels like they have to justify their spending. In addition, they understand the long-term effects of their spending.
“What it meant for us,” Vikki said, “is that I know that I’m going to have money in the event of something. So the car breaks down, there’s going to be money for it. If I want a new car, we’re going to have money for it. But best of all, the money that comes into my account, I know that no matter what, I can spend that freely.”
For Andrew, automation was the turning point. After automating his various accounts, he’s confident his money is available to meet his daily needs.
“Once I made the decision to implement the Perfect Account Structure and automate the process—and that really is the key, isn’t it?” he said, “I felt a sense of calm come over me.”
Freedom From Confusion
For Linda, creating the Perfect Account Structure eliminated financial confusion. In the long run, she has hope her debt will soon be terminated. She also has motivation to keep saving toward Financial Freedom. She feels in control of her spending, because she tells her money where to go instead of just watching it disappear.
Larry no longer has to hawk on his wife and kids’ spending habits to make sure they don’t overspend the checking account. An Everyday Account for each family member means they are each taking responsibility for their own spending.
“It has made a huge difference,” Larry said. “I’m seeing my savings starting to grow, I have money set aside for those planned future expenses, and each one of us has the freedom to decide when and where we spend our money.”
Wendy has a huge weight off her shoulders. Her new account structure is much more streamlined, and her accounts are working in her best interest. She has peace of mind her bills are paid. And she still has money left over for fun without constantly checking her account balance.
Michael feels in control of his finances too. Whatever life throws at him, he has an account to pay expenses from, whether it’s an emergency car repair, a family member’s birthday gift or a future goal.
It’s About Where You’re Going
As Susan says, “It’s not about where you are today. It’s about where you’re going in the not too distant future.” Setting up your Perfect Account Structure may feel daunting right now. But as you watch your money grow in each of your accounts, and experience peace of mind from knowing you have money for your varying expenses, you’ll understand what true Financial Freedom will feel like.
Have you set up your Perfect Account Structure yet? What was your experience? Let us know in the Financial Foundation Community!
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Dr. Tony is the co-founder of MindShift.money and the best-selling author of three books on personal and business finances. Having achieved Financial Freedom at 27, Dr. Tony believes that through Financially Fit Bootcamp and Cash Flow Cure everyone can get there. He has made it his life’s mission to help others live a life where their money works for them—not the other way around.