If you want to be successful with money, you need to have a good money system in place. Your money system consists of all of the financial accounts and tools you use to keep your financial life in order – things like your checking accounts, savings accounts, and any fintech apps you might use. Once you have your money system set up, you’ll find that everything just sort of runs on its own. Money gets saved and invested automatically. Bills get paid. And really, you just sit back and relax while your money system does its thing.
Over the years, I’ve fine-tuned and tweaked my money system to the point where I’m pretty happy with how it works. Of course, this isn’t to say that there’s only one right way to set up your money system. Your money system is like a fingerprint – it’s unique to you. Still, with all of the financial options out there, it helps to see how others have things set up.
In this post, I’ll share all of the accounts, tools, and apps I use for my own money. My hope with this post is that it gives you ideas for how you can set things up with your own money system. Feel free to pick and choose bits and pieces from my system that works for you. If nothing else, it should at least be interesting to see how I do things.
Note that I first wrote this post in 2018. Since then, some things have changed. I’ve now updated this post for 2021 and beyond.
The Financial Panther Money System
The base of my money system consists of four layers – a primary checking account, various savings accounts, microsavings apps, and my business bank accounts. Here’s how it works:
1. Checking Account
The first line of my money system is my checking account. My checking account serves as my financial inbox. All of my base income goes into my checking account first, then automatically gets shuffled off to different parts of my money system. Because my checking account is the starting point of my money system, it’s super important that I use a good one.
For a long time, I used a free online-bank called Simple, which was one of the first fintech banks out there. Unfortunately, they were purchased by BBVA a few years ago and then shut down in 2021. I wrote about my decision to switch banks after I received this news.
After some thought, I decided to go with Ally as my primary checking account. Ally is an online-only bank with no fees, no minimum balance requirement, good customer service, and an easy-to-use app and website. I think Ally combines a nice mix of an established bank with the fintech features of a newer, cutting-edge bank.
Ultimately, you can use any checking account that makes sense for you. The main thing is to pick a checking account that is 100% free and does not require any minimum balance. Ally is the bank that makes the most sense for me.
2. Savings Accounts
While you really only need one checking account, I think it makes a lot of sense to utilize multiple savings accounts. That’s because there are a lot of things that we need to save for and creating multiple savings accounts, rather than utilizing one savings account, makes it easier for us to earmark our money for our specific goals.
My savings accounts generally consist of two types. The first are accounts that I use for my emergency fund. The second are accounts that I use for short-term and medium-term goals. Here’s how they work.
Emergency Fund. I have a two-step system when it comes to my emergency fund. First, I like to keep a small buffer emergency fund of around $500 in an Ally savings account. I think Ally is a good savings account because it has a solid interest rate, no fees, and no minimum balance requirement. Plus, it’s where I have my checking account, so it’s easy for me to also have an Ally savings account for this purpose.
After my buffer emergency fund, I store the rest of it in what you could call “mega high-yield savings accounts.” These are FDIC-insured savings accounts that earn 3-5% interest. The catch is that these accounts have limits on how much you can put in them and typically require some initial setup work. However, once set up, these accounts can run themselves. If you take the time to set up all of these mega high-yield savings accounts in advance, you can put away a good amount earning much more than your typical savings account.
I currently keep over $40,000 in my emergency fund, with $17,000 earning 5% or more interest and the remaining amount earning 3% interest. I use the following savings accounts for my emergency fund, with my wife and I each having an account for each:
- Ace Elite
- Western Union
- H-E-B Prepaid
- Digital Federal Credit Union (DCU)
- H-E-B Debit
- Service Credit Union
If you’re interested in utilizing this strategy, you’ll need to read the following posts, which will give you an overview and guide you through how to set these accounts up. These are not accounts that you’ll want to set up without a thorough understanding of how they work.
- Where To Get 5% Interest Savings Accounts Now That Insight Is Gone
- Getting More From My Emergency Fund With 3% and 5% Interest Savings Accounts
- Netspend Account: The Ultimate Guide to a 5% Interest Savings Account
In addition to these accounts, I generally keep a chunk of money that I use for bank account bonuses. It’s a complicated topic that is beyond the scope of this post, but here’s a guide to bank account bonuses I wrote. A few of the easier bank bonuses you can earn include Chime, SoFi Money, WeBull, and M1 Finance.
Short-Term/Medium-Term Savings. For short-term and medium-term savings goals, I recommend using a high-yield, online savings account that allows you to create multiple sub-savings accounts. The four options that I recommend are Ally, Capital One 360, Discover Bank, and Marcus by Goldman Sachs. All of these banks allow you to create multiple sub-savings accounts, have no fees or minimum balance requirement, and offer a good interest rate for this type of account.
Capital One 360 used to be my primary online savings account (I signed up for it back when it was ING and online banking was still fairly novel). Unfortunately, it has gone through some changes over the last few years that I think have made the website and app worse. At the moment, my favorite of these four options is Marcus by Goldman Sachs and it’s the bank I’m currently using for my short-term and medium-term goals.
As for how I set things up, I create different savings accounts for all of my short-term and medium-term goals. Some are more concrete goals – I know Christmas is coming every year, so I’ve set it up so that my savings account automatically sets aside a set amount for Christmas each month. Other goals are less concrete. My stupid mistakes fund, for example, is a savings account where I put away a small amount of money each month to help me pay for dumb mistakes I might make in any given year.
In short, I use mega high-yield savings accounts for my emergency fund and I use Marcus by Goldman Sachs for my short-term and medium-term goals. I then automate everything so that I don’t have to actively manage my savings.
3. Microsavings Apps
After my basic checking and savings accounts, I like to also add a third layer to my money system by using apps that you could call “microsavings apps.” These are fintech apps that run in the background and monitor my financial accounts. They then save small amounts of money for me each day that I typically won’t even notice. It’s not a ton of money, but these small savings do add up. It’s important to know that these microsavings apps aren’t enough to serve as your sole form of savings, but it is a nice way to squeeze a little bit more savings from your budget without even noticing it,
There are two types of microsavings apps that I utilize: (1) a “round-up” app; and (2) a “sweep” app. Here’s what they mean and how they work:
- Peak Money. Peak serves as my round-up app. To use Peak, you link your credit cards to the app. The app will then monitor all of the transactions that you put on your credit cards. Whenever you buy something, Peak will round up that transaction to the nearest dollar, then save the spare change into a separate savings account. I like to think of it as an online piggy bank. These are small amounts, so I don’t notice the money being saved, but over time, the spare change that I save does add up. Check out my Peak Money Review for more information about how this app works.
- Albert. I use Albert as my sweep app. Albert works by analyzing the cash flow in my checking account. It then saves small amounts of money for me each week that it thinks I won’t notice. Using an app like Albert is a great way to “sweep” out some of that excess money from your checking account and force yourself to save just a little bit more. You can check out my Albert review for more info about how it works. I also have a step-by-step guide I wrote about how to earn the Albert referral bonus.
4. Business Accounts
In addition to my personal accounts, I also have two business checking accounts that I use for my blog business and my gig economy work. If you have any business – whether it’s a side hustle or your main business – it’s important to set up a separate business bank account that all of your business revenue goes into.
The business bank accounts I use include the following:
- Bank Novo. This is the business checking account I use for my blog income. Everything I earn from this blog goes directly into this account. Bank Novo is a completely free business checking account that works perfectly for what I need. Check out my Bank Novo review for more detailed information.
- Lili. This is the bank account I use for all of my gig economy and other side hustle income. Any money I earn from my side hustles goes directly into this bank account. Whenever I pay myself from my blog, I also send it directly into this account. I like Lili because it automatically sets aside a percentage of my income for taxes, which is very helpful when you’re self-employed. Be sure to read my Lili review for more information. You can also check out my Lili referral bonus guide for step-by-step directions on how to earn money opening this account.
After my basic banking accounts, I then have a slew of different investment accounts – both taxable and tax-advantaged. Obviously, a lot of what you use will depend on where you work, but here’s what I’ve got going on:
Pre-Tax Retirement Savings. I currently have pre-tax retirement savings in three different places.
- 457 Plan. The bulk of my retirement savings is in a 457 plan that I have with the state of Minnesota. When I left biglaw, I rolled over my 401k into this plan since the state plan was really good. Right now, my 457 includes my 401k contributions from my first job, as well as my 457 contributions from when I worked for the state. The state plan is cheap, and these funds are all invested in low-cost, Vanguard index funds.
- Solo 401k. Since I am self-employed and have a bunch of side hustles, I set up a Solo 401k to gain access to some extra tax-advantaged space for myself. If you’ve never heard of a Solo 401k, it’s something I like to think of as a bonus retirement account for side hustlers. I use Fidelity for my Solo 401k because it’s free, accepts rollovers from other tax-deferred accounts, is fairly easy to set up, and allows you to invest in low-cost Fidelity index funds. If you’re looking to set up a Solo 401k, here’s a step-by-step guide on how I set up my Fidelity Solo 401k.
- Health Savings Account. I use Lively for my Health Savings Account (HSA). Lively is a good HSA company because it has no fees and allows you to invest in low-cost ETFs via TD Ameritrade. I currently have all of my HSA funds invested in Vanguard ETFs. The only downside with Lively is that I have to manually buy additional shares, so it adds another thing I have to do. I only have to do this every two weeks or so and it only takes a second, but it’s still something. You can read more about my thoughts on Lively in my Lively Review.
Roth IRA. I currently have my Roth IRA with Vanguard. Initially, I started my Roth IRA with Betterment, then moved it over to Vanguard a few years ago. I did this because when I started my Roth IRA, I had no idea what I was doing and Betterment made things really easy for me. For many people, it can make sense to start with Betterment or Wealthfront, and then once you have a decent amount saved up in your Roth IRA, move all of it directly to Vanguard.
529 Plan (College Savings). My wife and I had a baby in 2020, which means we needed to start saving for college. We live in Minnesota, which gives a state tax deduction for contributions to any 529 plan. I opted to go with the New York 529 plan because it uses Vanguard funds and charges only 13 basis points, which is one of the lowest (if not the lowest) fees in the 529 plan world. Which 529 plan you should pick depends on where you live. If you’re in a state that offers a tax deduction for your state’s specific plan, then you should use your state’s 529 plan. If you’re like me and are either in a state that doesn’t have a tax deduction or that gives you a tax deduction for investing in any 529 plan, then consider using New York’s 529 plan.
Taxable Investments. Since I’m still early in my investing career, I don’t have much in taxable accounts yet. That said, I do have one taxable account that I regularly invest a small amount in. I currently use M1 Finance for my taxable investment accounts. I like M1 Finance because it’s a free roboadvisor and makes it very easy to automate your investments. They also offer a referral bonus – here’s my M1 referral bonus guide for instructions.
Fintech Apps That I Use
After all of the bank and investment accounts, I also have several fintech apps that I use every day. All of these apps are free and ones that I think everyone should consider using.
Mint & Personal Capital. I use both Mint and Personal Capital to monitor all of my financial accounts. Mint is better for keeping track of transactions and balances in all of your accounts. Personal Capital is better for analyzing your investment accounts. I think it’s best to use both apps together (they’re both free, so you have no reason not to use them both).
Prism. I use Prism to keep track of and pay all of my bills. This is especially useful for someone like me since I like to manually pay my bills and see all of my bills in one spot. Even if you have all of your bills set to auto-pay, I think it still makes sense to link them so you have them in one app. For more info about Prism, be sure to check out my Prism review.
Credit Karma + Credit Sesame + Wallethub + Experian App. It’s important to keep tabs on your credit report and credit score. I have multiple apps that monitor my credit report so I can make sure that nothing bad happens to it. Anytime I open a new line of credit or have a hard inquiry on my credit report, I get multiple notifications from all of my credit monitoring apps. Credit Karma monitors my credit reports for TransUnion and Equifax. Credit Sesame and Wallethub both monitor my Transunion credit report. The Experian app monitors my Experian credit report. Anytime there’s a hard pull or a new account appears on my credit report, I get a notification immediately through all of these apps.
There’s no one right way to set up your money system, but hopefully, this post can give you some ideas of how you can set things up. Your money system can change of course – I’ve switched over time between a traditional brick and mortar bank account and online-only bank accounts. Fintech apps like Albert, Peak, and M1 Finance didn’t even exist a few years ago.
Really, the important thing is to figure out what tools and systems work for you. It’ll be an evolving process. But once it’s set up, things will just run themselves and you’ll find that you keep ending up with more money, without even realizing it. That’s the power of having a smooth, running money system.
To wrap it up, here are all the bank accounts and investment accounts I use:
- Checking Account: Ally Bank
- Savings Accounts: 3-5% interest accounts for my emergency fund; Marcus by Goldman Sachs for my short-term and medium-term goals
- Microsavings Apps: Albert; Peak
- Business Checking Accounts: Bank Novo; Lili
- Retirement Accounts:
- 457 Plan: Minnesota Deferred Compensation Plan
- Roth IRA: Vanguard
- Solo 401k: Fidelity
- Health Savings Account: Lively
- Other Investment Accounts:
- Taxable Accounts: M1 Finance
- 529 Plan: New York 529 Plan
How’s your money system set up? Let me know if you have any accounts or tools you use that I should be incorporating into my money system.
freddy smidlap says
we switched to online checking/saving at ally a few years ago. they’re just great and they raise the interest rate without you having to ask. the one thing about not having a local bank is that we feel better keeping a slug of cash in the house above the amount you can get from an ATM. we keep a thousand bucks around in case of emergency where the power might be out and you can’t get any from an ATM. that’s just food for thought.
Financial Panther says
Yep, Ally is a good one and is what my wife uses as her primary bank account for both checking and savings. She used to have a traditional brick and mortar bank (lame).
I keep no significant cash around my house, but really, I can’t think of too many situations where I need to pull out cash immediately. I suppose it can happen in a natural disaster situation or something, but yeah, I just hate carrying cash…
Will Ally offer any cash back for signing up with them?
Can one open a CapitalOne card with even as little as $5 and get $200 cash from then for opening?
Financial Panther says
As far as I’m aware, there’s no sign up bonuses for Ally. It’s still worth having an account with them, so I recommend it.
The Capital One 360 bonus is targeted, so you have to figure out a way to get that offer. I randomly got a mailer that offered me the $200 bonus, so that’s how I got it. I’m not sure what the secret is to get targeted.
Erik @ The Mastermind Within says
Thanks for the post! 🙂 I’m glad we could hear from you 😉
My money system is pretty simple – close to 0 apps, Mint and my spreadsheet 🙂
Financial Panther says
zzz…boring. Haha, but yeah, you seem like a streamlined dude. You know me – I like to use weird stuff and make it more complicated.
Thank you so much for your post! My money system is currently very similar to yours except I do keep two brick and mortor Bank of America checking accounts (a joint with my spouse and a personal) for the event that we need to have face to face teller assistance. I have not been inside a branch for the last five years though–(ATM banking only). Our Bank of America accounts are free so long as we commit to a direct deposit of $250.00 or more. Until literally this morning, I was using the Digit APP but found out about the new administrative fee that will be applicable after my 100 day introductory period expires (No Thank You). Thanks for the insight on other similar FREE (for now) apps on the market. I am going to look into Qapital and Albert and will likely just roll the funds that had saved in Digit right over to each of those! Your blog is awesome and I am glad that I found it.
Financial Panther says
Glad the post was helpful! I used Digit for about 2 years before they switched over to the fee model, then started using Dobot before, of course, they went to a fee model. Luckily, since these types of apps are just saving money for us, it really takes no work to just get rid of them and move onto another version that does the same thing for free (I think it took me 5 minutes to switch over to Albert).
I didn’t know that I could have a 529 plan, and then transfer that to my future children. Do you know what happens to the plan if I never have any children?
Financial Panther says
Yep, you can always change your beneficiary designation on your 529 plan. I have one for myself, and my wife has one for herself (she was paying tuition for her residency, so we were running her tuition bills through her 529 plan in order to generate some credit card spend (a little extra money hack there), and to get a tax deduction too).
If you never have kids, you can always use it on yourself if you ever want to go back to school. Otherwise, transfer it over to a niece or nephew and be the best uncle or aunt ever (you can change the beneficiary to anyone, not just immediate family).
Good to see someone organizing it the way i would, actually i was glad after each section revealed that my system was similar to yours. I had started thinking that i have spread it out too much but now i have and expert’s confirmation.
I just yesterday signed up for Acorn and its charged, so i will checkout Qapital and Albert.
I do have multiple Roth Fidelity, Schwab and Vanguard.
Also i like Robinhood to play a little in individual stocks, very small part of my investments but it doesn’t charge you for Equity trades so i like it.
Someone looking to diversify into Real Estate should try Fundrise.
And i recently put in the work as advised by you in setting up the Insight and Netspend cards- thanks for that tip.
Whats your view on P2P lending, who is the best player as per you?
Also what’s your view on Whole Life Insurance ?
Financial Panther says
Haha, great minds think alike! I have Robinhood too, but I don’t really mess with individual stocks – it was just a sort of test thing and I use it for triggering bank account bonuses (more on that in another post someday). If you’re going to buy individual stocks, I think Robinhood makes sense, although I really hate how they treat investing like its a game and I also do not like how they’re pushing crypto on people now.
For P2P lending – I’m anti-P2P lending now unless you just have so much money that you don’t know what to do with it. My rationale is that P2P lending is tax inefficient, has a capped return, is still correlated with general market conditions, and has a weird all-or-nothing aspect where one bad investment can wipe out the rest of your good investments. I’m too poor to mess with P2P lending, but my brother plays around with it some and it’s fine, but ultimately, a pretty meaningless part of his portfolio.
Whole life insurance is bad for 99% of people, and probably 100% bad for people who are in the Financial Independence space.
Mr. MFC @ Morning Fresh Cent says
Thanks for the post. I have always had Capital One 360 savings and only recently switched to their money market account, which gives a slightly higher rate if you maintain a 10k minimum. The 5 percent return is a good hack but way too much work. Lol
Financial Panther says
Haha, yeah, the 5% accounts aren’t for everyone. Set up your system your way is what I say.
Brian Mason says
Why do you recommend moving all your retirement funds to Vanguard after betterment/wealthfront?
Financial Panther says
The common criticisms of robo-advisors is that you’re paying for a service that you can do yourself for free – i.e. just investing directly with Vanguard. I use Betterment for my Roth IRA, which many would say is not necessary, but I find its good for the early stage investor who just needs to figure out how to get started. At this point, I’ve learned enough that I can pretty much just invest it directly with the Vanguard funds I want. There’s no problem with going Robo forever – it’s just a decision I’ve made.
Brian Mason says
Right now I have both of our IRA’s with betterment. It seems to do a good job of taking care of my needs and will hopefully do so in the future. Do you just have a IRA with vanguard and then purchase low expense ETFs that meet your needs and risk level?
Are there any other fees that would be incurred that would not make that switch valuable?(ie, fund purchase fees, account creation fees)
Hi Kevin, do you still use Astra & can you do a review on it?
Financial Panther says
Hey Steven. I’ve had an on-again/off-again relationship with Astra. I’ve spoken to the CEO of the company before and they are definitely a small team. For the most part, it did what I needed it to do, but I had a few glitches where I would schedule a transfer, then nothing would happen. They are very responsive when you contact them and it seems like they’ve continued to improve.
I’m going to get back to using it again some more because I do see promise in it and they’ve definitely improved since I first discovered it a year (or was it more than a year?) ago.
Long story short, if you have a use case for it, then I think there’s value in it, especially since they seem to keep improving it.
Thank you for your response Kevin. This was very helpful. Be safe and well.
You have a lot of moving parts to your system and I’m glad it works for you and it’s nice to have all these options. I’ve simplified my finances in the last few years and I really like that my money is in one easy to manage place.
Question. If you have a mortgage, is an offset account where you should put all your money until it’s paid off? Aaron
We have 18 different financial accounts including some web bank accounts but in our small rural area it pays to also have accounts at the local banks. The CEO’s of these banks are personal friends and that kind of local network is worth far more than the meager interest on the best high yield savings accounts, at least to me it is. Plus it earned me five figures in free stock due being on a local bank board. We have regular monthly deposits from investment accounts into our checking account to serve as our income stream.
Financial Panther says
Sounds like an interesting spot to be in. If you have bank CEO friends, definitely work those connections!
Hey Financial Panther! Is there a reason you use so many different credit monitoring apps that have so much overlap? If you’re using Credit Karma and the Experian app, why use credit sesame and wallethub at all if credit karma already does transunion? Thank you!
Financial Panther says
Hey, there’s no real reason I need all of them. I just like to. One thing is whenever I get a hard pull, all of my monitoring apps buzz at the same time. I sort of like that – makes it really hard for me to not notice a new line of credit and I guess it makes me feel more secure.
Using just Credit Karma + Experian is perfectly fine.
Very informative and well-articulated post. Thank you.