Magazine

6 Smart Ways to Use Your Banking Accounts

By Krista Cavalieri

Most people don’t think too much about their bank account. Once they get it all set up, they just start depositing money in and spending money out. Some people might have a second account they use to save money ... but that’s about it.

A photo of an iPhone with the Ellevest app open to an Ellevest Spend Account with the roundup feature turned on, next to a wallet with the Ellevest debit card and several bills, with a $20 bill showing.

There’s nothing wrong with that approach — but it isn’t the only way. If you use them strategically, your banking accounts can become really useful tools to help you manage your spending, keep yourself on budget, and hit your money goals.

When you become a member, you get two banking accounts — an Ellevest Save account and an Ellevest Spend account (set them up here, if you haven’t yet). You can definitely use them as your “main,” don’t-think-about-them banking accounts. But they also can be helpful if you’re looking for ways to organize your money a little more strategically.

Here are a few smart ways you might use your Ellevest Save and Spend accounts to keep yourself on track.

3 strategic ways to use your Ellevest Spend account

The Ellevest Spend account was built to help you — you guessed it — spend smarter. It’s FDIC insured, and it comes with a debit card and unlimited ATM fee reimbursements. And you can turn on the roundup feature*, which automatically transfers the spare change from each purchase into your Ellevest Save account (more on that in a sec).

Three ways you could put that Ellevest Spend account to good use:

For your spending money

This one pairs well with one of our favorite budgeting methods: the one-number approach. The idea is to figure out how much money you can afford to spend each week on “flexible costs” (aka the things that you have to make decisions about). First, you’ll account for your fixed costs (aka things due every month, like rent and Netflix) and the money you’re setting aside for Future You (saving, investing, and debt payments beyond the minimums due). Then, what’s left is your “one number” for flexible costs. You only have to keep that one number in mind each week, which can help you stay on budget.

So you could transfer your one-number amount into your Spend account each week and use your Ellevest debit card to make those purchases — things like food delivery, shopping, groceries, etc. Any time you want to know how much you have left to spend for the week, you can just log in and see.

You can use the Ellevest Spend account this way even if you aren’t following the one-number approach exactly. For example, if you’re using the 50/30/20 rule (50% of your income to needs, 30% to fun, 20% to saving and investing for the future), you could use it for your “30% to fun” bucket. It’s just a nice way to separate out and track your spending money.

For the bills you pay every month

This way to use your account is basically the exact opposite of the method we outlined above. Instead of using the Ellevest Spend account to separate out your spending money, you can use it to separate out the money you have earmarked for bills — things you absolutely have to pay each month. If you get that “bills money” out of the way, you’ll be less likely to accidentally spend it on other things.

Start by adding up your monthly fixed costs, and then figure out how much you need to set aside out of each paycheck to cover them. Then set up direct deposit so that amount goes right into your Ellevest Spend account, and put your bills on auto-pay — the good old “set it and forget it” approach.

To “pay yourself” each week

Getting paid irregularly (freelance life, amiright?) or infrequently — say, monthly — can make it hard to budget your spending. Some weeks, you’ll be flush with cash, and some weeks, you might come up short.

If that’s how your income works, you could deposit the checks you get into a separate account, and then “pay yourself” into your Ellevest Spend account each week (or whatever cadence is right for you). Then you can use your Ellevest Spend account to track and manage your everyday spending.

3 smart ways to use your Ellevest Save account

Ellevest’s Save account is also FDIC insured, which makes it a safe place to keep your savings. It also separates that money out from your Ellevest Spend account while keeping it quickly and easily accessible — there aren’t any fees for withdrawing your money whenever you need it.

To start your emergency fund

All those things listed above make the Ellevest Save account a great spot to start saving for emergencies — that three to six months’ worth of take-home pay to help cover you in case an unexpected expense comes up or your income takes a hit. And turning on the roundup option to put your change from each purchase into your Ellevest Save account could help you hit your goal faster, too.

For a short-term savings goal

We’re all for investing toward your long-term goals here at Ellevest, but when it comes to saving for something that’s coming up in the next year or so, we recommend keeping that money in an FDIC-insured account instead — yep, like the Ellevest Save account. We’re talking about goals like saving up for a vacation you recently started planning (when we’re allowed to go on vacations again), or those gorgeous hardwood floors you dream of installing someday, or even something like the cost of tuition for a return to grad school next year. Giving your savings goals their own special banking account can help motivate you to hit them — they feel more real that way, and it’s easy to track your progress. And again, the roundup feature could give you a little extra boost.

For your non-monthly expenses

One aspect of following a budget that’s really important but often overlooked is setting aside money for expenses that come up less often than once a month. For example, maybe you have a six-month auto insurance policy. Or an annual subscription to a news outlet or two. Or even end-of-the-year holiday gifts, or a vacation you take every year. Things like that can mess with your carefully calculated weekly or monthly spending plan.

We recommend making a big list of all those non-monthly expenses, totaling them up, and then dividing by 12. That number is the amount you should save each month so that you have enough when they come due.

At the end of the day, there’s no right or wrong way to use your banking accounts, as long as you find a system that works for you and your real life. Your Ellevest Save and Spend accounts are here to help.

Ellevest members can set up banking here. Not a member? Get started.


Disclosures

Good to know: Together, the Ellevest Save and Spend accounts are FDIC-insured up to $250,000 per depositor (that’s you) through Coastal.

Btw, the Ellevest debit card is issued by our friends at Coastal Community Bank, pursuant to license by Mastercard International.

The fine print: A domestic ATM transaction fee will be reimbursed as long as you've had a payroll direct deposit into your account within the 30 days before that ATM transaction settles. There’s also an international ATM withdrawal fee of $5.

Important legal stuff ahead: If you opt in to the Roundup Program for debit card purchases, each settled (i.e. fully completed) purchase transaction made with your Ellevest Debit Card will be rounded up to the nearest whole U.S. dollar. The Roundup amount will be transferred from your Ellevest Spend account to your Ellevest Save account. Foreign purchases are rounded up to the nearest whole dollar after the purchase is converted to U.S. dollars. ATM withdrawals and transactions in whole US dollars, e.g. $20.00 are excluded from the Roundup program. If, at the time of settlement of a purchase, your Ellevest Spend Account has insufficient available funds to cover the full amount of the Roundup transfer, the Roundup Transfer will not be made. If a purchase is canceled or reversed for any reason (including disputes), the corresponding Roundup Transfer will not be reversed. You can opt out of the Roundup Program at any time.

© 2020 Ellevest, Inc. All Rights Reserved.

The information provided does not take into account the specific objectives, financial situation, or particular needs of any specific person.

Banking products and services are provided by Coastal Community Bank (“Coastal”), member FDIC, pursuant to license by Mastercard International. Together, the Ellevest Save and Spend accounts are FDIC-insured up to $250,000 per depositor through Coastal.

The Ellevest debit card is issued by Coastal Community Bank, pursuant to license by Mastercard International.

Domestic ATM Transaction Fees will be reimbursed if a payroll direct deposit has been received within the prior 30 days of the ATM transaction settlement. International ATM withdrawal fee of $5 will apply.

If you opt in to the Roundup Program for debit card purchases, each settled (i.e. fully completed) purchase transaction made with your Ellevest Debit Card will be rounded up to the nearest whole U.S. dollar. The Roundup amount will be transferred from your Ellevest Spend account to your Ellevest Save account. Foreign purchases are rounded up to the nearest whole dollar after the purchase is converted to U.S. dollars. ATM withdrawals and transactions in whole US dollars, e.g. $20.00 are excluded from the Roundup program. If, at the time of settlement of a purchase, your Ellevest Spend Account has insufficient available funds to cover the full amount of the Roundup transfer, the Roundup Transfer will not be made. If a purchase is canceled or reversed for any reason (including disputes), the corresponding Roundup Transfer will not be reversed. You can opt out of the Roundup Program at any time.

Funds held in your Ellevest investment accounts are not FDIC insured, not guaranteed by Coastal, and may lose value. Ellevest does not guarantee investment performance. Investing entails risk, including the possible loss of principal, and there is no assurance that the investment will provide positive performance over any period of time.

The information provided should not be relied upon as investment advice or recommendations, does not constitute a solicitation to buy or sell securities, and should not be considered specific legal, investment, or tax advice.

The information provided does not take into account the specific objectives, financial situation, or particular needs of any specific person.

Ellevest Membership fees are as follows: Ellevest Essential is $1 per month, Ellevest Plus is $5 per month, and Ellevest Executive is $9. Other fees as described in Ellevest’s Wrap Fee Program Brochure and the Ellevest Membership Terms and Conditions Agreement will continue to apply.

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Krista Cavalieri

Krista Cavalieri is a money coach at Ellevest and a CFP® Professional. She works with Ellevest members to help them take financial control and make a plan to hit their money goals.