AYM™ System: How to Separate Your Bill Paying Money from Daily Living Money
Written by Julie M. Watkins
Have you ever sat at your kitchen table after a long week, opened your banking app, and felt that heavy, familiar knot tighten in your stomach? It is frustrating to work every single day, only to find yourself scrambling at week's end to cover the electric bill or checking your balance in the grocery store line, hoping your debit card will clear. If you are caught in that exhausting loop, take a deep breath. You do not have bad habits or lack discipline. You are just caught in a structural trap because you are keeping all your cash in one bucket. When your everyday spending money is mixed into the same account that covers your rent or mortgage, you are forced into a mental balancing act. The secret to this cycle is to separate your cash into three distinct pools-one for bill paying, one for daily living and leisure, and one for savings.
The first thing you do is build a protective wall around the money you need for your bill paying pool by setting up what I call a "Fortress" account. This is a separate checking account at your local bank. Make sure it does not have a debit card attached to it. Its job is to collect all your earnings, pay your fixed monthly bills, and funnel money into your other accounts. To figure out exactly how much cash needs to stay inside this account each week for bill paying, use a simple bit of math called The 48-Week Magic™. Add up your regular monthly bills for an entire year and divide that total by 48 weeks. The beauty of this is that because you make deposits for all 52 weeks in a year, you silently build an entire month of extra bill pay money as a quiet, cushion of savings within the bill pay account.
Once you have that weekly bill pay number locked down, you subtract that number from your weekly earnings. The answer is your spending money for living and leisure, your "Current," and savings, your "Reservoir." You set a fixed number for each of these pools. The money for your Current is kept in a different account at the same bank and it is linked to your Fortress account. This checking account has a debit card so it can handle your normal weekly life, like groceries, gas, kids' activities, and fun stuff. Your savings account, called your Reservoir, is the third account at your bank for the savings pool. It, too, is linked to your Fortress account.
With your pools established, your next step is to turn on the machine and let bank automation do the heavy lifting for you. You set up your employer's direct deposit-or make manual weekly deposits yourself-so that 100% of your earnings are deposited every week into the Bill Pay account. This locks down the funds needed for your bill paying. Next, you schedule a recurring, automated weekly online transfer to push the amount of your living and leisure money from the Bill Pay account straight into your Living account every single Friday. You set up another weekly transfer for the savings amount. Now, use the online Bill Paying system to pay all of your bills from the bill paying account. All you need to do now is monitor to be sure your weekly paycheck covers the three weekly amounts for your pools of cash and that your bill pay account has the funds to pay the upcoming bills. You spend only from the Living account leaving your bill paying money securely locked down for bills only. Over time, you will have a cushion of cash in your bill paying account so you will have even less stress.
Once you have this System in place, money is no longer a source of constant chaos. You have taken control of it in absolute confidence. People live their lives on a weekly rhythm and now you have aligned your bill paying with this rhythm. Your bills are paid on time, your everyday spending account is safely funded, and your savings pool is growing. You have successfully separated your bill paying money from your daily spending money. By creating these pools of cash and automating your System, you gain breathing room and peace of mind.