My Bank Accounts’ Scheme: Passively Build Up Assets And Automatically Save Money
By: Walid Ao
Tags: Money, Wealth, Finance, Crypto, Investing

1. Consume bank accounts

a) Fixed costs account

This is my main checking account, and my salary and all of my money incomes are paid to this account. The second my paycheck arrives, it is split and transferred automatically to all of my other accounts. I keep my fixed and reoccurring costs in this account, such as housing, subscriptions, utilities, and insurances.

I keep track of all my fixed and reoccurring costs in the previously mentioned Excel table. Therefore, I’m never surprised by a payment that I did not account for. I know exactly the amount of money I have to keep in this bank account each month.

I account for €200 a month for cash withdrawals if necessary. In my experience, I end up using €100–€150 a month. By the end of the month, the remaining money is transferred to my luxury saving account automatically.

b) Household account

My wife and I each put €500 for household and outings in this account. We pay for groceries, restaurants, bars, movies, etc., from this account.

If this account runs out of money near the end of the month, We will pass on dining out or going out with our friends. I never overspend on outings or groceries. We strictly control our budget, and we seek to optimize our spendings every month.

Each Sunday, we plan our groceries for the upcoming week, and we plan where we want to buy them from. Grocery prices tend to vary where we live; every week, every grocery store has special low prices on certain items, and we plan our purchases accordingly. We don’t travel 10–20 km extra for groceries. We live within walking distance from seven major grocery stores.

However, we do not pay primarily with this account. This account is only for safekeeping the money. We pay with our credit card to take advantage of its rewards program. We might use this account’s credit card for instances in which our American Express is not accepted.

The remaining in this account by the end of the month, if any, is transferred to our luxury and brokerage accounts (20% and 80%, respectively).

c) American Express card

As I mentioned before, we use Amex to pay for almost everything. This card is linked to our household account. Our household and outings purchases are already covered with the amount of money we keep in the household account. Any other purchase (plane tickets, hotel reservations, clothes, etc.) is taken from the luxury savings account. We keep a list of our credit card spendings to ensure that we pay our spendings from the right cash reserve.

We use this card to pay for almost everything because we take advantage of its rewards program and cashback (for certain stores). The points we collect yearly are enough to upgrade hotel reservations and upgrade long-distance plane tickets to business class, contributing to our chosen lifestyle.

The card costs us €12 monthly, but these fees are already covered by the cash backs and special offers we utilize. Currently, we own the golden Amex card, and we thought about upgrading to the platinum card early this year. However, we stopped our plans after the pandemic. I think we will upgrade when life returns to normal.

d) Emergency fund

This is my emergency fund account. I try to keep three months’ spendings in this account for unexpected expenses. It is not meant for buying new smartphones, laptops, or the newest gaming console. This account is reserved for emergencies only, such as when a car or a household appliance breaks down.

Earlier this year, we decided to allocate six months’ spendings to this account to prepare for the pandemic and the uncertainties in 2020. This saving account grants us a small interest rate, but we can access the money immediately if necessary.