Two Checking and One Savings Account: The Perfect Combo to Automate Your Payday Routine

How great would it be to pay all your bills, save money automatically, and still have money to spend freely with no worries? The trick is to set up a payday routine with two checking accounts and one savings account!

My 15-Second Spending Plan payday routine shows you how to move money between your two checking accounts and a savings account to seamlessly pay your bills, build your savings, and enjoy guilt-free spending.

You can use the same payday routine to make your life easier and reach your financial goals that my children and I have used.

Table of Contents

• Payday Routine 01 – Set up direct deposit to your primary checking account
• Payday Routine 02 – Set up automatic transfers to your secondary checking account
• Payday Routine 03 – Set up automatic transfers to your savings account
• Payday Routine 04 – Send money from your savings account to your brokerage account
• Payday Routine 05 – Set up automatic payments between your secondary bank account and your payees
• Payday Routing 06 – Make debt snowball payments from your primary checking account
• Payday Routine 07 – Spend freely what remains in your primary checking account!

Payday Routine 01 – Set up direct deposit to your primary checking account

The first step in automating your payday routine is setting up your paycheck for direct deposit to your primary checking account.

Next, you need to change your mindset on how to use your primary checking account. You no longer pay bills and pay your debts from this account. Those are now paid from your secondary checking account.

Your primary checking account pays for your wants and personal enjoyment! After you have completed your payday routine, any money left in your primary checking account is yours to spend freely.

Under my 15-Second Spending Plan, there is no need to waste time budgeting for “Wants“. Once your primary checking account reaches zero, your spending on Wants is done until the next payday!

Payday Routine 02 – Set up automatic transfers to your secondary checking account

Open a secondary checking account if you don’t already have one. My children and I have our secondary checking account at the same bank as our primary checking account. This makes setting up the automatic transfers very easy.

The bills you want to pay from your secondary checking account include recurring expenses, debt payments, and short-term sinking funds. These are typically considered your “Needs” by many budgeting apps.

Next, set the amount that must be transferred each payday from your primary checking account to your secondary checking account. Unlike a budget that must be updated every month, your 15-Second Spending Plan is only updated a few times a year. You can set up the automatic transfer amount and not need to adjust it for several months.

Tip: Many employers let you split your direct deposit between two or more bank accounts. Setting up direct deposit to the secondary checking account can eliminate potential bank fees.

In the example below, the monthly total on Row #7 for recurring expenses, debt payments, and short-term sinking funds is $2,390.00 per month. Since they are paid twice a month the amount per pay is $1,195.00. A miscellaneous amount of $5.00 is added to get to an even $1,200.00 per pay to transfer from the primary checking account to the secondary checking account. You can see the detailed breakdown by expense, per pay, in the infographic above.

Payday Routine 03 – Set up automatic transfers to your savings account

Open up a savings account if you don’t already have one. My children and I also have our savings account at the same bank as our checking accounts. Once again this makes the setting up of the automatic transfers seamless.

Putting long-term sinking funds in a separate savings account helps you avoid spending that money on other expenses. So many times I talk to someone who hasn’t had a vacation in years because they spent the money on something else.

Tip: Many banks have Savings account withdrawal limits of six transactions a month. So you want to keep your savings account transactions to a minimum throughout the month.

In the example below, the monthly total on Row #10 for long-term sinking funds is $500.00 per month. Since they are paid twice a month the amount per pay is $250.00. You can see the infographic above they are saving $100 per pay for vacation and $150.00 per pay for a new home.

Payday Routine 04 – Send money from your savings account to your brokerage account

As your bank savings account grows transfer money to a brokerage account. I recommend doing this for three reasons:

• First, you won’t be tempted to use the money for something else if you cannot get to it easily.
• Second, many brokerage accounts money market funds have interest rates 5 to 10 times higher than you earn in a typical bank savings account.
• Lastly, if you have a long-term sinking fund for a home purchase you can show the bank how you saved for the downpayment.

Payday Routine 05 – Set up automatic payments between your secondary checking account and your payees

All the money you need for recurring payments, debt payments, and short-term sinking funds is now automatically deposited into your secondary checking account. Now it is time to automate your bill payment process. Here are the most common ways to do that.

• Automatic debit – With this method, you provide your secondary checking account routing number and account number to the payee. The payee automatically deducts the payment from your secondary checking account on the due date.
• Online banking – With this method, you log in to your online bank account and are provided a list of payees that can be linked with your bank. You select the payee and provide the payee account number and the bills will begin showing up for online banking payments. You can go in and select the payment date manually or better yet schedule them to be paid automatically on the due date. Make sure the online bank payments are taken from your secondary checking account!
• Zelle, Venmo, or other – Perhaps you share expenses with a roommate or partner. Then most likely you are sending money back and forth to each other via Zelle or Venmo. You can link multiple bank accounts with both Zelle and Venmo and have the money sent to and from the correct account.
• Credit cards – While you can set up automatic bill payments with your credit card, I recommend this for only those with zero credit card debt. With this method, you provide the payee with your credit card number and they will charge your credit card automatically on the due date. If you pay your credit card balance out of your primary checking account you will need to transfer money from your secondary checking account to cover recurring expenses and short-term sinking fund items paid by the credit card.

Routine 06 – Make debt snowball payments from your primary checking account

I often see advice that you can eliminate debt with the debt snowball method. However, if you are not funding all of your recurring expenses, other debt payments, plus your short-term and long-term sinking funds first, your debt snowball will melt.

Can you live on the money that remains in your primary checking account after the transfers to your secondary checking and savings accounts and after making a debt snowball payment?

The infographic shows they have $750.00 remaining before the debt snowball payment. If they put $75.00 per pay towards their debt snowball payment they will be left with $675.00 to spend until their next pay ($750.00- $75.00 = $675.00). They must keep their spending on wants to $675.00 or less otherwise they will need to borrow again in the future.

If you have no room for a debt snowball payment you will need to cut the amount to be sent to the secondary checking or savings accounts. If that can’t be done you may need to get a second job or see if you are splitting bills fairly with your partner.

Routine 07 – Spend freely what remains in your primary checking account!

After completing your payday routine the money left in your primary checking account is money you can now spend freely!

Once your primary checking account gets to zero, you are done spending until the next paycheck!

There is no need to budget your spending on “Wants”. By looking at your primary checking account balance, you know what you have left to spend.

If you have credit card debt, put the credit card away and use your debit card or the cash envelope system to pay for “Wants”.

Conclusion

There you have it. A complete payday routine to put your finances on auto-pilot! You will no longer need to worry about having the money to pay your rent or car insurance. You can take vacations and spend money on the little things you enjoy guilt-free.

Set up your two checking and one savings account and start your payday routine ASAP.

Let me know in the comments below how my payday routine worked for you.