162 | Simple Money Systems

Many lawyers have complicated systems to manage their money. Having a bunch of different bank accounts and credit cards makes it a lot harder to manage your money and often leads to avoiding it altogether. In this episode, let’s talk about how to simplify your money system.

• what your money system is
• how many lawyers manage their money
• why complicated money systems make it harder to manage your money
• the money system my husband and I use
• a similar system for lawyers who don’t share finances with a partner

n/a

If you’re ready to learn the mindset and strategies to master your money, let’s schedule a call.

You’re listening to Wealthyesque. We are a community of lawyers who believe that true wealth is having control of our time. I’m Rho Thomas, and as a busy wife, mom, and former Biglaw associate, I know all too well the tension between the culture of the legal profession and pretty much everything else you want to do in life. That’s why each week, I’m bringing you the information and tools you need to improve your money mindset and manage your money to create true wealth. Because ultimately, it’s not about the money. It’s about the freedom and flexibility the money affords.

Hey friend. Welcome back to the show. I hope you’re doing well and having an amazing day so far. Today we are talking about simple money systems. When I talk about money systems, I mean the way that you manage your money from day to day so things like the accounts that you have the debit credit cards, you use stuff like that. I’m not getting into investment and retirement accounts and other things like that. I’m just looking at your day to day money. Management System. I have talked to so many lawyers who’ve got a bunch of different accounts with no rhyme or reason why. So they’ve got this account over here, and it’s got $50 in it. And that account over there has some of my paycheck that goes in there. But this other account goes into the other account and whatever else. It’s like this whole crazy convoluted system of accounts that they’ve opened at different point in their lives, but there’s no real system here. There’s no strategy around it. I’ve literally only had one client in the last three years who could justify why she wanted all those different accounts and her system was still too complicated for me like for my tastes, but she really liked it and she wanted to keep it and that’s all good. Like she had reasons why she had those different accounts. That’s fine. For the rest of you don’t have any specific reasons why you want to have all these different accounts. I want you to think about simplifying, because when you’ve got 20 different accounts and you’ve got five doing credit cards, and three different debit cards and whatever else, it starts to feel really complicated. And when your system feels complicated, it means you are less likely to actually look at it to actually do the things you need to do to improve your money. It also introduces this little bit of friction with your money like you’re not sure which card you should use for this thing and how much you should put in this account and which account you should use to pay for this bill. Right. So there’s that that piece of it that’s creating a mental drag where you’re having to make so many different decisions about your money. And you’ve already got all these different things swirling in your head. And so when you’ve got these additional questions about these little decisions about your money, that just kind of takes away from the things that you already have to do, right, you’ve already got work stuff and family stuff and friends stuff and all of that. So let’s save your brain power for those things. And not for these little decisions about which credit card you should put this purchase on. I’m going to share the system that my husband and I use and then I’m also going to share how you can implement something similar whether you share your finances with a partner or not. So first getting into my system, my husband and I have two joint accounts. So we’ve got a joint checking account and a joint savings account. And then we also each have a personal checking account. And when you manage your finances with a partner, I like to have a set amount of fun money that each partner gets to spend no questions asked each month. This concept came from when my husband and I first started managing our money together and the biggest point of tension in our relationship was the money that we were spending on stuff that the other person didn’t value. So for me, I was putting a lot on makeup and beauty stuff. And for him it was Starbucks and we will both be like questioning each other. Like, why are you spending all this money? Right? So to remedy that, we decided that we would each get a set amount of money that we could spend no questions asked and we’re only a few months into managing our finances together at this point. So we had moved the money from our personal checking accounts into this joint account that we had opened, but we still had those personal checking accounts and so we just decided to use those checking accounts to funnel the fund money into so all of our money comes into our joint checking account and then we have a monthly transfer out to those individual checking accounts for the fun money. And then we also have a joint savings account and again the money comes into the joint checking account and it gets funneled out to the joint savings account. One thing that comes up a lot with checking accounts is maintenance fees. Way too many people are still paying fees on their checking accounts in 2023. I do not like paying bank fees. I think it’s ridiculous that banks have the audacity to have us pay the money for the privilege of them holding on to our money and loaning it out to other people and making money off of it. So if you’ve got an account where you’re paying some sort of monthly maintenance fee or minimum balance fee or whatever, look at changing banks, there are plenty of banks out there that don’t charge monthly maintenance fees. They don’t have minimum balance requirements like all of that and they even pay you interest. So two accounts that I like are with Charles Schwab and Ally Bank. The Schwab one is called something like the investor checking account and it comes attached to a brokerage account where you can buy investments and all that but you don’t have to. And then the other one, like I said is with Ally and I think they only have one checking account, and it’s called the spending account. And again, like Schwab, they don’t have maintenance fees or minimum balances and they pay interest. So if you’re still paying fees with your bank, those are two accounts you can look into. I don’t have any sort of relationship with them other than the fact that I use them myself, but I know there are plenty others out there as well. So even if you don’t want to use one of those, there are other options available. The saving side we have a single joint savings account with an online bank. It is a high yield savings account, which means it pays more in interest in your typical brick and mortar bank does. And if you don’t have a high yield savings account, that’s something you want to look into as well. I like ally savings account because they have this bucket feature that allows you to divide out your savings among different goals. So it’s one savings account but you can say x amount of it is my emergency fund bucket and Y amount is my down payment for my house and z amount is for vacations and I just think it’s really cool. Then on the credit card side we have a joint card and then we each have our own individual credit cards as well. So I never have this moment of which credit card should I use for this right? I use the joint credit card for stuff that’s for joint expenses to for our family, and I use my personal credit card for fun money type expenses. And the way that we manage our money is we put everything on our credit card and pay it off at the end of the month. That’s how both of us were managing our money before we got married. So we just continued that but we don’t have two different credit cards and trying to figure out which one we should use for this purchase. It was a joint expense. It goes on the debit card if it’s like personal fund money stuff, it goes on a personal credit card. I don’t have any specific recommendations for you in terms of credit cards, because I don’t worry about points and all that kinda stuff. So I can’t tell you that you should absolutely get this credit card or that credit card because that’s just not my wheelhouse. But I would encourage you to look at all the credit cards that you have and figure out maybe which one offers the best benefits for you. Or maybe even just which one has a high enough credit limit that you can use for your 20 fences or for your personal expenses throughout the month. And then choose one to use for your expenses and one to use for your personal stuff. And if you don’t want to manage your money that way like you don’t to put everything on a credit card and pay it off. Or maybe you’re not in a position to do that because your credit card balances are too high right now that’s fine too. But still choose one debit card right so choose which checking account is going to be for joint expenses and use the debit card associated with that for joint expenses and choose which ones will be for your individual like fun money expenses, and then use that debit card for your fun money stuff. And then with respect to those of you who are not sharing your finances with someone else, you can still implement a similar system. So for my clients who don’t share finances with a partner, I’ll still have them set up a separate account for their fund expenses as a way to break those out from their core expenses. So the same way that a couple of breakout their individual fund money stuff from the joint family expenses, someone who is not sharing their finances with a partner can do the same, same concept. We still want it to be money that you get to spend no questions asked. It’s just that in this case, it wouldn’t be another person who will be asking questions about it. It will be you second guessing whether you should have bought this thing or whether you should have spent this money or you know, whatever it is for you. So when you separate out your fun money from the money that you need to cover your other expenses. You don’t have to feel guilty or second guess your purchases. So give yourself a set amount each month for fun spending and put it in a separate account and you get to spend that on whatever you want. And you know then that when you make purchases from that account, you’re not going to affect your ability to cover your other expenses or to reach your financial goals. Alright, so those are the tips I have for you for simplifying your money system. I hope that they are helpful for you. And again, take these as suggestions you by no means have to implement the things that I’m saying. But I have found simplifying my money system to be a really easy way to make sure that I don’t feel overwhelmed by my finances and I’m able to actually do the things that I need to do to manage them to move forward. And listen if you need help with simplifying your money system you want to learn how to manage your money better reach out to me at rho thomas.com/call. Let’s talk about how we can work together. Alright, that is it for this week’s episode connect with me over on social media. You can find me most often on LinkedIn rho Thomas, and Instagram at I am rho Thomas. Subscribe to the show and leave a review both of which help more people to find it. And please think of a friend or two who could use this information and share the episode with them. As we close out friend I pray that you take the information you learn here, apply it in your life and open up to the realization that wealth is available to you as you do that consistently. Week after week. You’ll continue to take steps to regain control of your time, build wealth and live a life of freedom and choice you deserve. Talk to you later.