The One Thing You Need To Do To Stop Stressing About Money

No one likes to think about bills. But if you’re like most people, you think about them constantly. You may be stuck wondering each month how much you can spend on groceries and still have enough left for utilities, rent and other recurring expenses.

Your bills aren’t going anywhere (sorry!), but that doesn’t mean you have to stress about them.

In fact, if you structure your finances the right way, you’ll hardly have to think about them at all!

The Perfect Account Structure

The foundation of Financial Freedom is building the perfect account structure or system that directs the flow of your income into various accounts that serve different purposes. Whether that’s paying your rent or mortgage, going out to dinner or putting away for your future freedom.

For a closer look at how this works, download the Perfect Account Structure worksheet accompanying Module Two of our Financially Fit Bootcamp Program.

Once you’re all set up, your new structured account system will consist of:

• A central Income account that includes income from joint and/or single accounts;
• A few key secondary accounts starting with a Bills account and an Everyday account to address daily purchases; and
• A Pay Yourself First (PYF) account that will be used to build your freedom fund, eliminate debt or increase your safety net fund.

In Module Two, Video Four of the Financially Fit Bootcamp, we go over the nuts and bolts of this new account structure and explain how parts may vary slightly depending on your particular circumstances (e.g., you’re married with two income earners, single, a parent of pets, etc.).

The Three Main Types of Accounts

The first thing you need to understand before setting up your new structure is the differences between the three main types of accounts. Below are the basic guidelines for each:

1. Your Income or Bills Account – This account covers bills, bills and more bills. It’s not to be used for your everyday—your variable—expenses or have an ATM debit card attached to the account. Only use this account to accumulate income used to pay your bills like electricity or water. I suggest setting up automatic bill pay using this account.
2. Your Everyday Account – This account (and only this account) is for expenditures like groceries, gas, entertainment or apparel. This should be your only account with a debit card attached and the only place you spend from to go to the store, take in a movie and gas up the car. Ideally, you’ll replenish this account every seven days through a deposit or paycheck. That means you’ll never go more than six days without having income. People who only replenish this account monthly often run out of Everyday money sooner than anticipated and may feel tempted to dip into their Bills account to cover variable expenditures. This throws a wrench in the flow of money in your structure and impedes your success. The rule of thumb here is simple: If there’s money in this account, you can use it. But if there’s no money in this account, stop spending!
3. Your PYF Account – Your monthly PYF amount goes toward eliminating your debt, creating your freedom fund and covering your various risk insurances and other safety nets. You need to set up an automatic transfer to send your PYF amount into this account 72 hours after your paycheck is deposited into your Income account.

Moving Into The Future

When you have your perfect account structure set up, and you’re following the rules for using them—(I go into depth on these in Module Two)— you won’t need to spend time worrying about whether you can cover your recurring bills. Everything will be taken care of for you!

Of course, it’s important to keep in mind that there are all kinds of other expenses like surprises, gifts and vacations throughout your year. You’ll need to set up additional accounts to take care of these.

Using this account structure, you’ll be able to spend with confidence, and be free from money stress. So what will you do with all that time you used to spend worrying about money?