Action Plan: How to Organise Your Bank Accounts

Thinking of your bank accounts as the physical containers for your money makes it easier to visualise where your money is allocated making it easier to stick to your current budget with the view of reaching those long term goals. Even if you have your money split into different accounts currently, now is a good time to see if you can optimise that setup for even better results. With a few strategic moves, you can set up a banking system that practically enforces your budget for you. Let's dive in!

Why It Matters

Before we start opening accounts left and right, let's talk about why this matters. Visual separation prevents overspending. When funds for different purposes live in different places, you instantly know how much you have for each category. Automation becomes possible with the right account structure, letting you automate transfers on payday and reducing the need to rely on willpower. Plus, watching dedicated savings accounts grow provides the motivation to keep going when you're tempted with a splurge.

Using the 70/20/10 Method

The 70/20/10 budget is popular for good reason—it's simple but effective. Here's how to create bank accounts that support this approach if you have chosen to use it:

Step 1: Take a look at your current account setup

Before adding new accounts, have a look at what you already have. Most people start with a primary everyday account where your pay goes into, maybe a general savings account, and perhaps a credit card. Instead try splitting the general and savings funds into further separate accounts or "buckets".

Step 2: Create accounts for each budget category

For the 70/20/10 method, your ideal setup would look something like this:

70% (Essentials & Lifestyle)

Your primary everyday account would handle rent/mortgage, bills, groceries, and regular expenses. Any left over money is further split into the 20/10 percentages. Consider setting up a ‘Fun Money’ allowance - this could be a separate everyday account with an amount allocated from the 70% for discretionary spending. This is your guilt-free spending money for restaurants, entertainment, and spontaneous purchases like that sausage sizzle at Bunnings on Saturday morning.
Tip: Add that money to a separate prepaid money card to really shield yourself from overspending.

20% (Savings & Debt Repayment)

This category needs a bit more structure. You should be splitting this 20% among three important goals: paying down debt, creating a Safety Net and your savings goals. Create separate money buckets to manage these three key areas which can be more difficult to manage.
1. If you're paying down debt, create a dedicated debt account to cover your payments. Tip: As your debt goes down, use any surplus to make extra payments beyond minimums to speed up the debt elinimation. Once you’ve paid off your debts you can allocate that money to your Emergency and Savings funds.
2. Create an account for your ‘Emergency Fund’. Aim to have the balance of that account reach 3-6 months of essential expenses (read more about this topic here).
3. Consider a goal-based savings account for specific short to medium-term goals this could be a new winter coat, or a new car. Tip: a small amount is better than nothing and keeps you in the habit of maintaining regular saving.

10% (Future/Investments)

Your super account will handle some of this, but you might also want an investment account to generate additional wealth separate from your Superannuation.

Step 3: Set up your automation system

Set up automatic transfers from your primary account and send your money where it needs to go. Schedule these transfers for just after your payday. Move 20% to each of your savings accounts and 10% to investment accounts, leaving 70% in your everyday account for monthly expenses. If you’ve set up additional accounts to manage each of these larger "buckets", then move that money too. Also set up automatic bill payments from your primary everyday account to ensure essentials are always covered first – your rent/mortgage, utilities, phone bill and other regular expenses.

Beyond 70/20/10

Not everyone can (or wants to) stick to the 70/20/10 formula. Maybe your rent in Sydney is eating half your income, or you're aggressively paying down a HECS debt. Here's how to adjust:

The Priority-Based Account System

Start with a ‘bills’ account. Calculate all monthly fixed expenses (rent/mortgage, utilities, minimum debt payments, insurance) and create a dedicated everyday account just for these. Set up direct deposit or automatic transfers to fund it on payday.

Next, create a variable essentials account for groceries, petrol, and other necessary but fluctuating expenses. Transfer a set amount here each pay period.

Even if you're stretched thin, prioritise an Emergency Fund. Even if it's just $20 per paycheck to start, automate contributions to a savings account with decent interest.

Goal-based savings are important too. Create separate savings accounts or "buckets" for specific goals with different timelines. Think short-term (gifts, small repairs, annual subscriptions), medium-term (holidays, new appliances), and long-term (house deposit, education).

Finally, set up an "Fun Money" money allowance. Whatever's left after your priorities can go here. This is your guilt-free spending money for restaurants, entertainment, and spontaneous purchases like that sausage sizzle at Bunnings on Saturday morning.

Different Banking Options

Traditional Banks

Ask about package deals where fees are waived when you maintain certain balances or use specific services. Online banking services are often fee-free with better interest rates, and often allow multiple savings accounts to setup your "buckets" for different goals. The downside? No physical branches and cash deposits can be challenging. Digital banks like Up, Ubank, and ING allow you to create multiple savings accounts with custom names for different goals.

Credit Unions

Credit unions are member-owned, often with lower fees and better interest rates, but may have membership requirements and potentially outdated technology. Many credit unions participate in shared ATM networks, giving you access to thousands of ATMs nationwide.

Hybrid Approach

Many Aussies find success using a combination: one bank for primary everyday account and cash transactions, another bank or Credit Union for savings accounts with decent interest, and an investment platform for super and other investing goals. This approach can help you further separate your day-to-day living and expenses from your long-term goals.

The Bottom Line

Your bank account structure is the bridge between your theoretical budget and your actual spending habits. By creating physical separation between different categories of money, you make it easier for your future self to make good financial decisions.

Whether you follow the 70/20/10 method or create your own custom system, the key is consistency and automation. Set it up once, then let your banking structure do the heavy lifting of budgeting for you.

Remember, the best system is one you'll actually use—so start simple, build habits, and adjust as you grow!

Practical Tips For Success

• Start small. If creating six accounts feels overwhelming, begin with just separating needs from wants. You can add more sophisticated divisions later.

• Name your accounts with purpose. "Noosa Holiday 2025" is more motivating than "Savings Account 2."

• Consider account visibility. Some people like to see all accounts in one dashboard; others do better when savings are "out of sight, out of mind."

• Review and adjust every few months. Your banking structure should evolve as your financial situation changes.

• Watch for fees. Ensure you're meeting minimum balance requirements or other criteria to avoid bank fees eroding your progress.

• Remember that your budget should work for you, not the other way around. If your banking setup feels like a chore rather than a help, it's time to simplify.