If your self-employed (and even if you aren’t) here are some accounts you should think about having

A tax account:

If you make self-employed income you should have a savings account for your taxes. If you can’t afford to put away a lot, put a $1 in every time you make income, but have a space for it. Once money starts rolling in you’ll be grateful you’ve build this into your structure

A business spending account:

Having a separate place to spend from for your business makes things easier. If it’s a chequing account you’ll have your own business debit card that you can use for expenses in the moment. You’ll also be able to better tell what money is specifically for your business (without stealing it from your rent).

A personal fixed expenses account:

A great way to think about sorting expenses into different accounts is ‘like things go together’. Why putting all your fixed expenses in one account works is because it’s a number that doesn’t change from month to month. You know that if you put $3,000 in that account, then all your bills will be paid. You also know that if you only have $2,000 there on the 1st… that you need to find some more money. Keeping it separate also helps the stress of accidentally spending money that’s earmarked for a fixed bill.

A personal spending account

The perfect pair to your fixed expenses account is a separate spending account. You can use this for all your other monthly spending (food, transportation, movies, Pokéman cards). If you’re using a debit card for all that spending you’ll be able to easily check in to see how much money you have for the rest of the month. It will help you answer questions like “can we afford to go for dinner tonight?”

A series of savings accounts for annual expenses

Everything that isn’t a fixed monthly expenses or a general monthly expense can have a separate savings account. Yup… you can have that many savings accounts. Name them after the thing you’re savings for. Call them ‘Christmas $50” or ‘ Health $100” and then put that amount in them every month (or as often as you can). Even if you can’t fully fund them every month you’ll be able to easily see how much you have set aside for that purpose. It will help you answer questions like “how much can I spend on Christmas this year” or “Can I afford to go on a vacation”.

Download a blank version of this worksheet here


How much should I put in these accounts?

That depends on your own numbers. You can go through some old exercises of ours to get an idea or you can just pick some numbers and experiment (not for fixed… that will have to be the same).

Try putting $200 in your spending account and see how long it lasts.

Experiment and see what works and what doesn’t, and then adjust and add accounts where you need.

Which banks should I be using for this?

Again, no right answer… but I am aware that using bank accounts like this can really up your fees.

Go back to the work we did last week and see how much your accounts are costing right now, are there ways that you can reduce those monthly fees? Do savings accounts cost a lot at your bank?

One option is always to use an online bank such as Tangerine, PC Financial or EQ bank. But make sure to check with them as they sometimes have limits on the number of accounts you can use or perhaps won’t have the spending choices you want.

Always go back to what tools you need to spend and save… and then compare the costs of getting that in order to see what’s worth it to you.

Emily Nixon

Emily Nixon

Rags to Reasonable Community Outreach Coordinator

Emily Nixon is an actor/writer/director/filmmaking Swiss Army Knife. She is also a big money nerd and Community Outreach Coordinator for Rags to Reasonable.

She came to this work after becoming completely fed up with living paycheque-to-paycheque and being too afraid to look in her chequing account. She is passionate about empowering other artists and variable income earners to keep doing what they love and feel confident about their finances.

Email Emily at emily@ragstoreasonable.com

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