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new accounts structure :S

January 23rd, 2009 at 10:22 am

DF and I have been talking about how we're going to structure our accounts once the house sale is final. We both agree it would be a good idea to keep track of how much each of us pay off the mortgage. I'll just keep track of that on a spreadsheet, it will be interesting to see. I might even start printing it out to be motivating and stick it on the fridge.

These are my ideas for account structure:

Mortgage Account: we will make extra regular payments and these won't be withdrawn.

Offset Account: This will be our large savings account and EF. We won't take money out unless we get less work hours per week, something breaks etc or for planned (and saved for!) renovations. The point of this account is so we don't redraw from our mortgage, but it still saves us on interest. I may also, down the track, deposit amounts into this account that I've spent on the credit card and then withdraw when paying the CC. But only with complete control over the CC expenditures!

DF/My Personal Accounts: We discussed having personal accounts that we can access with ATM cards - where each week an amount is deposited automatically into this account. It will be our 'fun' money that we can use for whatever we please and not feel guilty about. Starting amount will be probably $50 for me and $100 for DF, and we will see how that goes. May have to adjust it up or down depending on how we feel.

Mini Savings Accounts: I might set up a couple of these to save for smaller items we agree on buying (so far: a new fridge, chest freezer, air con). It's pointless having these accounts, I know, when we can just add an extra amount into the offset acocunt each week - but it just seems more organised knowing the amount IS THERE and is being saved for, and is for a purpose. It's more peace of mind than anything else, and if it's only small amounts I guess the interest amounts are hardly anything anyway.

Main Account: Where all our wages will be deposited, and where all deposits to other accounts will come from. The mortgage interest payments will also come from here, so I expect to always have a minimum amount in here to maintain.

Credit Card: Will be used to purchase all or most of the groceries, petrol and houeshold expenses. Then I expect to transfer amounts spent from the main account into the offset account (if I'm organised) and then on due date back to the credit card. If not, then the money will sit in the main account. DF suggested keeping ALL reciepts (i am proud! he's doing well and is learning) so that if we spend money on the CC for say, a video game, then that person will know at the end of the month they have to transfer that amount from their personal account.


I like being organised, but what does everyone else think? having limits and set purposes for accounts really helps me keep calm for some reason (you would think it's the opposite!), much more calm than say, having a main account, a mortgage and a credit card. That just SCARES me.

Anyway. Because I'm such an organisational FREAK, I have even made a chart:




9 Responses to “new accounts structure :S”

  1. homebody Says:
    1232714753

    I'm confused. Are mortgages different in Australia? You have mortgage account and then talk about the interest separately? And withdrawing? Please explain!

    Otherwise, I admit we have different accounts set up. We also get an allowance each month ($100.00 each). We were putting everything on our Amex, but am sick of huge bills, so we are going cash this year except for gas/petrol.

  2. Koppur Says:
    1232721864

    I know the feeling of liking an account for each item. It's hard not to have 5 or 6 mini savings account for the things I am saving for. But right now I have settled for 3: personal account for anything I want, home account, which right now is for a new couch, eventually a house down payment, and EF.

  3. gamecock43 Says:
    1232730790

    I have heard Australian mortgages are different. I heard they are a sort of bank account that you can add and subtract from...is that right? And your chart is very confusing though I get where you are coming from. You sound like you have it all figured out in your head and thats whats important. And getting your BF on board is huge!

  4. whitestripe Says:
    1232748151

    lol - i dont know if mortgages are different in australia. this is what ours will be like, which is pretty normal:

    i have nominated to have one which is a split rate. i will have half variable and half fixed. the fixed portion you can only make $15k extra repayments over the entire fixed term, and can't withdraw. the variable amount you can pay anything up to less than a dollar owing (if you pay all of it - it will close that part of the loan - which is good and bad). you can withdraw all of your extra repayments for no fee from the variable portion. which makes it like a huge savings account, if you know what you are doing and don't take any more than you need. i prefer to have other sub accounts as well.

    homebody: our mortgage payments are interest only for the first few years - it is just the way the loan is set up, and anything extra we pay is principal.

    also the offset account is where the whole amount of that account offsets the mortgage - as in say i have $30k in my offset account, then 30k is taken off the balance of the loan for interest purposes and then interest is charged at the reduced amount.

    :S hope i helped in some way!

  5. homebody Says:
    1232758711

    No I'm more confused than ever, LOL!!

  6. whitestripe Says:
    1232763413

    lol its funny cause i think its really simple - i guess i am just used to the way things work here.

  7. frugaltexan75 Says:
    1232771417

    I must admit, I'm kind of confused myself. Smile The only thing we have in the states that you could 'withdraw' money from your mortgage is a home equity loan - and those aren't very good ideas.

  8. Analise Says:
    1232773142

    It sounds as if in Australia, one is able to get a type of mortgage that has a fixed amount plus a flexible amount. The "flexible" part is much like what we call a line of equity (LOE) here in the US. One difference is that in the US, the LOE is usually a separate loan but like in Australia, LOEs have variable rates (very low right now). However, in the US, one can take a withdrawal from the LOE, pay it off, and that amount is there to be used again if the consumer wishes. There is even a checkbook that comes with an LOE.

    I like your chart and commend you for the thorough way you have organized your savings. I think it's great for someone so young to be so wise about the importance of saving. I have posted about the many different savings accounts (buckets) I use. Everyone has to find the best way that works for them; what's important is that you are SAVING SYSTEMATICALLY!

    Regarding the credit card: do you use one that gives you rewards or miles (an added benefit)?

  9. whitestripe Says:
    1232874519

    analise: in australia we also have line of equity loans, which we would consider because we are both controlled when spending what is 'not ours' (ie credit cards) or what we are not supposed to (savings or extra payments). (never been in credit card debt and dont ever intend to.) however you need to have 25% deposit before getting a line of equity loan, so therefore we didnt get one.
    and yes the credit card we will be using will give rewards (in various forms - cash, flyer miles or actual stuff). my plan is to use the cc for lots of stuff and atleast earn enough rewards to offset the annual fee of our accounts. i think it is do-able. Smile

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