Life was so much simpler when you were a kid. You had a money box, you got your pocket money, and maybe some birthday money from your Gran. You knew to the penny how much you had!

Unfortunately, as soon as I lost my money box I also seemed to lose the ability to work out how much money I had. Today not knowing how much money I have is a risky business. Direct Debit has a lot to answer for. It may well make life easier to pay for things, but it certainly plays havoc with your finances.

All I wanted was the ability to go to a hole-in-the-wall and for the figure on the screen to be what I really had.  So, when I really needed to save and needed to know how much I had at any given moment I had to come up with a new system. I find that my three account system works a treat!

Esc’s Three Account System – Saving for an escape

1)      Work out your fixed costs. What can you not live without? Rent, Bills, Phone bill (those were mine). Change the direct debits so they are all coming out of one account. This is Account A. Make sure there is enough cash to just cover those fixed costs a month (set up a standing order)

2)      Work out a budget. What is the minimum you can live off a day? This will prove how serious you are about escaping! I’ve really stripped back and am now trying to live off no more than £8 a day (which includes travel and all my food). I’m not going to lie – it’s not the most fun but I have realised that spending more money per day = more time in boring job. Budget wins every time

3)      Use a second account (Account B) to cover your monthly budget. Everything you buy during the month comes out of this account. Then you can go to the hole-in-the-wall and the balance will be how much budget you have left that month.

4)      Have a third account (Account C) where the rest of your money goes. Then you can hopefully see it rising towards your escape goal!

For those non-Excel aficionados, spreadsheet and how-to guide coming soon!

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