Our accountant is a family friend who is a CPA whom we always went to because of self-employed income being complicated (at least to us). He always talks about a “black hole” in families’ bank accounts. If the money is there, somehow it disappears.
This was true for us for a number of years. We didn’t go into debt, but there was never money left over. Our savings didn’t grow. We had been given Dave Ramsey books and CDs, we wanted to have our emergency fund saved up. We just couldn’t seem to get it saved.
Finally, we remembered an old bank account Joseph had opened one year when he was living in a different town for his sophomore college year. It had a balance of $0.34. We decided to start direct depositing some of his weekly pay there.
Out of sight. Out of mind. Right?
It helped. When our checking account at our regular bank looked low, we were still saving, and we didn’t even realize it. We also started putting some of Joseph’s weekly pay in a credit union account Danielle had. We didn’t get online banking set up for either of those accounts. We kept checkbooks for them, but hid them in the back of a cubby hole.
Things felt tighter, but not by that much. Then, the biggest key: every time he got a raise, most of the raise was added to that Out of Sight/Out of Mind (Oos/OoM) account. This was the first step in changing our habits and controlling the black hole.