This information is provided in summary form and you should conduct your own research before using any of the companies listed.  Information is subject to change at anytime.  (Emphasis added)

From the Hertz FAQs site:

Debit Card Policy-

Q: Can I use my Debit Card or Bank Card to reserve a Hertz car?

A: At most Hertz locations, debit cards (sometimes called check cards) issued under a VISA or Mastercard logo which draw funds directly from the cardholder’s account may be used to qualify for rental. However, prepaid or stored value cards which have a VISA or Mastercard logo are not accepted to qualify for rental. Debit cards must have available funds for the estimated amount of the rental charges plus a reasonable amount to cover any incidental charges in order to secure the rental. Both debit cards and prepaid or stored value cards issued under a VISA or Mastercard logo may be used as a form of payment when you return the vehicle. Please contact your local Hertz Reservations Office if you have a question about whether Hertz will accept a certain card.

Cash Policy-

Q: What can I do if I do not have a credit or debit card in my name?

A: Cash Rentals are accepted with a Cash Deposit ID Card. Applications for a Cash Deposit ID Card are available from your local Hertz Office. Applicant must be 18 years or older and the application process takes approximately 30 days. There is a $15USD nonrefundable processing fee. A Hertz Cash deposit ID Card may be used at a Hertz Location.

From the Enterprise Website-

Debit Card Policy-

Debit Card:

Some locations will accept a debit card for a rental deposit and/or payments. To be valid, a debit card must have a Visa or Mastercard logo.

Airport locations that are able to accept debit cards will require return trip itineraries.

Most local renters who would like to use a debit card for their deposit may need to complete a cash qualification process. The branch may ask for you to bring in two valid, current utility bills and your most recent paycheck stub.

It is common that a rental branch will require your drivers licence to be issued in the state you are renting.

We are happy to help you with policy information specific to the renting branch. Please contact us ahead of time to determine what is needed when renting with a debit card.

Cash Policy-

Cash:

For security reasons, our locations do not accept cash. We apologize for any inconvenience.

From the Avis FAQs-

Debit Card / Cash Policies-

Debit Card Policies

Avis reserves the right, in its sole discretion, to seek a Debit Card authorization hold in excess of the estimated rental charges. When using a debit card at Avis, there may be a minimum hold of $500 and a maximum hold of the estimated rental charges will be placed on your account.

Upon returning the vehicle, Avis will process a release of the unused portion of the hold subject to your bank’s procedures. The hold may take up to 2 weeks to be released by your bank.

If you fail to return the vehicle as agreed, Avis will obtain additional authorizations from your account to cover the rental charges.

Avis is not responsible for any returned checks or over-drafts based on this policy.

This policy applies to both U.S. residents and foreign renters.

Positive identification in addition to your driver’s license may be required.

In the United States, debit, cash or check cards can be used at the end of the rental for payment of rental charges. For acceptable credit identification and payment methods in countries outside of the U.S., please search for the specific location.

From the Budget Website-

Debit Card Policy-

Credit and Debit Card Rules

Generally, at the time of a U.S. rental, we’ll require a credit card hold of total estimated charges plus 25% or $200, whichever is greater. If you’re using a debit card at a location that accepts them, we’ll require a hold of total estimated charges plus 25% or $300, whichever is greater. However, for insurance/service replacement rentals and tour rentals, the minimum debit card authorization hold is $100. At select locations in the Northeast and North Central regions, the minimum authorization hold is $500. Renters under 25 years of age may not use a debit card. Look at the terms and conditions on your reservation confirmations for the deposit required at your specific rental location. Some select locations do not accept debit cards at time of rental to release the vehicle, but do accept debit cards for payment at time of car return.

Cash Policy-

Can I pay with cash?

Yes. Your deposit type, amount and method of payment will vary by Budget location.

From the National Website-

Debit Card Policy-

Debit Cards

When renting in the U.S., debit and check cards may only be used in conjunction with proof of a round trip travel ticket (airline, cruise ship or train) at time of rental.

A debit/check card is considered to be any non-credit card bearing the VISA, MasterCard or Discover Card logo.

Any other non-credit card without the VISA, MasterCard or Discover Card logo is not accepted.

For pick-ups in the United States, without proof of roundtrip ticket, debit or check cards are only accepted when returning the vehicle.

A credit card in the name of the renter must be presented at the time of pick-up.

Cash Policy-

Cash Rentals

Customers must meet National’s requirements for renting a vehicle without a credit card.

Only Economy through full-size vehicles can be rented with cash.

No Additional Drivers are allowed on Cash Rentals.

All cash rentals, including prepayments, vouchers, and the like will require a deposit of $300 per rental, in addition to the pre-calculated rental charges.

When the rental vehicle is returned in accordance with the rental terms and conditions, the cash deposit will be refunded upon return of the vehicle, and in some instances, the refund will be mailed to the customer following the return of the rental vehicle.

Summary:

Almost every major rental car agency WILL rent a car without a credit card.  Most, however, will place a “hold” on your debit card for the full rental price, plus, in most cases, an added deposit.

When it comes to payment, most will accept a debit card as payment when you return the automobile.  Available options appear to be:

A) Reserve the car with a company that allows you to use a debit card.  If you do this, be sure that you bank account has a sufficient amount to cover the deposit, the hold, and any other charges that you might incur.

B) RESERVE the car using your credit card and PAY for the car rental using cash or your debit card.

While I do not use a credit card to make purchases, I do carry one in my wallet.  If necessary, for the security of my family, I would use the credit card to reserve a car and then pay cash for the rental when I returned the car.

Before renting an automobile, understand a company’s policies.  Do your own research and call ahead if you have questions.  While I was compiling this information, I did not take into account ANY insurance-related policies.

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Can I Rent A Car Without A Credit Card?

After digging and pouring the footer for our house, it’s time to set our foundation.  Our financial foundation needs to be solid, stable, and able to support the weight of our financial house.

Three components of a solid financial foundation -

Insurance

At present, my wife and I have health insurance, term life insurance, disability insurance, automobile insurance, dental insurance, and renter’s insurance.  We also have an umbrella policy that protects us from events not covered by our renter’s or automobile insurance.  In the future, we plan to purchase long-term care insurance.

Ever few years, I review my policies with a qualified professional.  My wife and I believe in several ounces of prevention.

Debt Reduction

My wife and I really enjoy living debt free.  (It rocks!)  Our hope is that we can live the rest of our lives without borrowing money.  (We might make an exception for the purchase of a house.  At present, we live in a house provided by my employer as part of my compensation.  If I were to change jobs and we were to move, we would either rent or take on a mortgage, depending on what was right for our family at the time.  For the sake of this article, I’ll be speaking of non-mortgage debt.)

If you have high-interest debt, it’s time to get angry and do something about it!  Making minimum payments and dealing with credit card companies isn’t any fun.  Make a plan, eliminate your debt, and then move on to the really important things in life.

Emergency Fund

My wife an I have an emergency fund (roughly) equal to six months worth of expenses.  We built this emergency fund immediately after paying off our last debt.  The peace-of-mind it provides is priceless.  (While we were paying off our debt, maintained a smaller emergency fund between $800 and $2000.)  The amount in an emergency fund will vary, depending of family size, location, employment situation, and comfort level.  We sleep better at night, knowing that we have an emergency fund in place.

Pouring and setting a solid foundation can be back-breaking work.  Dealing with a financial foundation can be extremely taxing – mentally and emotionally.  I know, for me, it was overwhelming when we first began the process of getting out of debt.  I was embarrassed by many of the financial decisions I had made in my past and I felt somewhat lost as to where to begin.  Thankfully, I was able to connect with some good friends who had good advice and, little-by-little, I was able to make some very positive changes.

Go slow.  Understand what you are doing.  Keep things simple.  Move forward.

Start with a good, solid foundation – and the rest of the building will (almost) build itself.

Image by barron

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Our Financial House – The Foundation

Here’s a quick rundown of how we organize our finances and our financial documents -

Extremely Important Documents -

We keep our tax returns, marriage license, birth certificates, car titles, etc. in a fire-proof safe.  I have friends who keep such documents off-site in a safety-deposit box.  The fire-proof safe works for us.  I also have electronic copies stored on a removable hard drive.

Important Documents -

We keep cleared checks, bank statements, and other important documents under lock-and-key in a filing cabinet.  I have an accordion-style file folder for each year’s documents.  When a new year begins, I simply store the previous year’s folder in the filing cabinet and start a new folder.  Bills, checks, bank statements, etc. are filed alphabetically.

Electronic Documents -

For bills or other documents that I receive electronically, I keep a few in a folder on my computer’s hard drive, and store back ups on a removable USB hard drive.

Online Accounts -

In my browser, I have created a bookmarks folder labeled financial accounts.  I have links to all of my financial accounts saved in the financial accounts folder.  When I want to pay a bill online or take a look at my retirement account, I simply select the financial accounts folder, and click open all in tabs.  I then have access to all of my accounts.  I can log in to as many accounts as I need.

Inventory of Accounts -

I have a list of all of our financial accounts (places where we have money saved).  I have a printed copy and I have a copy on my hard drive.  Click here to view and download a blank copy of the inventory of accounts that I use.  I update this inventory once per quarter.  If you use this inventory, be sure to store it in a place where you (and your spouse) and only you (and your spouse) can access it.

Budget -

I use a the very simple, easy to use You Need A Budget software to manage our household budget.  Click here to read about the zero-based budget method that we use.  (YNAB is a long-time sponsor of No Credit Needed.  I’m more than proud to promote their products and I use their pro version every day.)  It usually takes me less than 30 minutes to create our budget, and less than 10 minutes per week to actually “manage” our finances.

Cash -

I do not like credit cards, and there are times when I do not feel like using my debit card.  I am a big fan of the cash management system known as the envelope system.  Click here to view a short video where I explain how the envelope system works for me.

The Process -

At the beginning of each month, I’ll sit down and create a monthly budget.  My wife will look it over, and we’ll make any changes that she suggests.  My wife gets paid at the end of the month, so on the 1st or 2nd of each month, I’ll deposit her check in our local bank.  Any monthly bills are immediately paid, via online bill pay.  Cash is “deposited” in our envelopes.  Any paper bill stubs that we might have are filed away in the accordion-style file folder.

Two weeks into the month, I receive my paycheck.  I deposit it in the local bank and then transfer any money allocated for savings to our ING Direct savings account.

As I receive bills throughout the month, I place them on a little table in our kitchen.  One week before the end of the month, I’ll open them, make plans to pay them, and file any that need to be filed.

My goal -

My goal is to keep my life (and my mind) as uncluttered as is possible.  I like for things to be “just so”.  Before I began to reduce my debt and work on my finances, I was extremely disorganized.  Having learned my lesson (a hundred times over), I know strive to be very organized.  I want to be able to spend my time on the more important things (people) in my life.  So, I have put a lot of work in to creating some systems that work for me.  Hopefully, you’ll find some systems that will work for you.

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How We Organize Our Finances

Back when I was a kid, maybe 13 or 14, my Dad inherited some land from a relative.  My parents soon decided to build a house on the land.  As part of the preparation for building the house, we had to dig a footer (also know as a footing).  For those who are unfamiliar with the term, a footer is a reinforced concrete pad that sits below the foundation of a house.  Digging and pouring a footer is hard, backbreaking, but necessary, work.

In order for a footer to do its job of supporting the foundation (and subsequently, the weight of the entire house) it has to be the proper size and shape for the job.  If I remember correctly, the footer we poured was roughly two feet wide and a 10 inches thick, and outlined the perimeter of the house.  It also ran length-wise down the center of the house, so that load-bearing walls could be built on top of it.

We had to dig down almost a foot into the hard soil, hacking and cutting our way through roots from nearby pecan tress.  After digging out a trench for the footer, reinforcing bar was placed inside the trench and we filled the trench with concrete.  Before the concrete could dry, we leveled it – and began our preparations to build the foundation.

I’ll have more to say about the footer in a moment, but first -

It has been several years since I worked on my parents’ house.  Truth be told, my Dad did the vast majority of the work, but I do remember most of the steps he took to complete it.  (Before I wrote this article, I called him, just to refresh my memory.)

At present, I’m drawn to several similarities between the building of a physical house and the building of a financial house.  Throughout the next series of articles, I’ll use terms associated with a physical house – the foundation, the roof, the walls – and use them to illustrate important financial fundamentals.

Just like any house, our financial house is unique.  At the same time, it shares many characteristics with any other house.  I’ll be writing specifically about the steps we have taken (and are taking) to construct a structurally sound financial house – a house that suits us.  At the end of the month, I hope to have completed a series which has made you think, made you ask questions, and perhaps, motivated you to think about your own financial house.

Now, it’s time to finish up with some thoughts about the footer -

It is impossible to overstate how important a footer is to the building of a house.  If the footer is too shallow or out of square, the house could sink, walls could crack, and plans could be rendered useless.  The truth is, that boring concrete pad, which sits hidden beneath the foundation, the walls, and the roof, is the key to a structurally-sound house.  There is nothing exciting about a footer, but that doesn’t mean that the footer isn’t vitally important.

Our Financial Footer – Organization

For me, the financial footer for my house is organization.  If I am to be a successful manager of household finances, I need to -

• know the location of important documents
• maintain a balanced checkbook
• be able to quickly access online account information
• regularly backup computer hard drives

Remember, the foundation, which is usually thought of as the bottom of the house, actually rests on the footer.  For me, it is extremely important that I stay organized.  Without organization, I cannot find insurance documents when I need them, I’m lost when it comes to finding last year’s tax return, and I’m frustrated when it’s time to pay bills.

My wife and I have created a system for staying organized.  Just like a footer, there’s nothing glamorous about organization – and you really only notice either when a problem becomes visible from “above”.  Without a proper footer, a house will fall.  Without proper organization, a financial house will be in disarray.

Tomorrow, I’ll write a bit more about organization – and then I’ll move on to the next step in building our financial house – laying the foundation.

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Our Financial House – The Footer

My wife and I have been married for almost thirteen years.  For that entire time, even before we got serious about managing our money, we believed in combining our finances.  Here’s our simple system and what works for us.

Our Combined Finances -

Checking Accounts -

We have one, joint, primary checking account.  My wife and I can both write checks from this account.  We both have debit cards associated with this checking account.  Since I’m the nerd, I keep up with the checkbook balance.  We write less than ten checks per month, mainly to pay for babysitters and daycare.  I reconcile the checkbook once or twice a week, which takes less than five minutes.  We both carry a book of checks, for the sake of convenience.

We have one, joint, online checking account.  We both have debit cards associated with this checking account.  My wife rarely uses this account, which is used primarily for online transactions.

Our expenses are pretty consistent, month after month.  Because we live on a budget, it’s relatively easy to predict when and where we’ll write a check or use a debit card.  We hold on to our receipts, write down check amounts, and then I will enter all transactions in our checkbook register.  I also regularly log-in to our checking accounts, just to make sure that we haven’t forgotten to record a particular transaction.

Cash -

We use the envelope system to manage our cash.  My wife has a set of envelopes.  I have a set of envelopes.  Click here to watch a video describing, in detail, how the envelope system works.

Again, there is a real advantage to living on a budget.  I usually shop for groceries, while my wife usually shops for clothing.  So, she gets the clothing envelope, and I get the grocery envelope.  This works for us, but other couples might need two clothing envelopes or two grocery envelopes, one for each spouse.

Saving Accounts -

We have one, joint, online savings account.  We both have access to this account.

How It Works -

The key to combined finances is open communication.  When we create our monthly budget, we are honest about our expectations.  If I think I’m going to play golf, or my wife thinks she’s going to visit the manicurist, then we talk about those things.  I’ve seen couples struggle to live on a budget – even a budget to which they have both agreed – only to find out that one spouse is hiding certain expenses from another spouse.

We only need one checking account (from which we both write checks) because we are constantly talking about our finances.  And, we have the freedom to talk about our finances (and avoid arguing) because we are both committed to our budget.

I trust my wife.  She trusts me.  We have three children, and we are teaching them to trust us..  Our system for combining our finances works because I know, that all times, my wife is doing what she believes is best for me and for our children – and she knows, that at all times, I’m doing what I believe is best for her and our children.

Inventory of Financial Accounts -

Because I am the finance nerd in our family, I’ve created an inventory of financial accounts for my wife.  I regularly update the inventory, so that she will have quick access to our financial information, should something happen to me.  If you manage your household finances, be sure that your spouse knows where important documents and accounts are located.

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What Works For Me – Combining Our Finances

There was a time when I was infected with a terrible condition – Next Month Syndrome

When my credit card bill came in the mail, I would make a promise to myself -

Next month, I’m going to do better.

When I reached for my credit card to make ends meet, I would promise myself -

Next month, I’m going to do better.

When a friend would mention that he was living on a budget, I would promise myself -

Next month, I’m going to do better.

When I would read a story about someone saving for retirement, I would promise myself -

Next month, I’m going to do better.

Here are some common side effects of Next Month Syndrome -

A failure to regularly balance one’s checkbook

A propensity to run out of money before one runs out of month

A constant worry about higher and higher interest rates

A rolling credit card balance, which rarely goes down, but often goes up

A stack of bills, unorganized, or even, unopened, piled high on the kitchen counter

A box of abandoned budgeting software and personal finance books

A growing sense of worry and fear

If any of these symptoms sound familiar, fear not!  There are cures for Next Month Syndrome!

Gather up all of your most recent bank statements, your checkbook, and a calculator.  You need to find out exactly where you stand.

• How much money do you have in cash?
• How much money do you have in savings?
• How much money do you have in checking?
• How much debt do you have?

Create a budget.  It doesn’t have to be overly-complicated and you will struggle for the first month.  That’s okay.  The purpose?  You need to know exactly how much money you bring home and exactly how much money you spend.  Resources -

• Creating a zero-based budget
• Creating a budget if you have irregular income
• 10 things to do before you create your new budget

Develop some system for organizing financial documents.  For me, I use an expandable file box and I file bills alphabetically.  I use one file folder for each year’s bills.  At the end of each year, I simply store that year’s file box, and buy a new one.

• Set aside some time, monthly and weekly, to manage finances
• Encourage each member of the household to participate in the process

Consider reading the 33 Days Series here at No Credit Needed.  This information-rich resource should help those who are looking to save money and get out of debt.

If you are in debt, and you are ready to get out, consider the following resources -

• Debt Reduction 101 – A Beginner’s Guide To The Debt Reduction Process
• Debt Reduction E-Book – A free E-Book which will help you create your own debt reduction program

Now, I’ve saved the most important step for last.  See, when I had Next Month Syndrome, I was in denial.  I wanted to live just like everyone else and I wanted to own what everyone else owned.  Then, I discovered something, a deep dark secret – all of those people – the folks that I wanted to be “just like” – THEY had Next Month Syndrome, too!

I made a decision – the most important decision I’ve ever made.  I decided to do something about Next Month Syndrome.  I created a plan, I set myself with determination, and I turned away from my old lifestyle.  It took some time, and I still feel some of the long-term effects, but I was able to overcome Next Month Syndrome.  You can, too!

Remember – All of the planning in the world is useless, unless that planning is coupled with determination.  Make you plan – and then do all that you can to stick to it.  Don’t wait until Next Month – do something NOW!

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Next Month Syndrome

There are dozens of budgeting products on the market.  I’m partial to the You Need A Budget system, but there are other great systems available.  Find a system that works with you, fine tune it to meet your needs, and then use your budget as a tool.

After selecting a budgeting system, it’s important to create specific budget categories.  When I first started budgeting, I had way too many categories.  I tried to be too specific.  Instead of managing my money, I just ended up spending time working on my budget.  If you have too many (or too few) categories, you might grow frustrated with your budget, and you might simply ditch it altogether.

What Works For Me – Budget Categories

I divide my budget into three major categories – spending, saving, and giving.  (I create a budget based solely on our household take-home pay.  In other words, I do not include pre-tax retirement contributions or employer deducted health insurance premiums.  Also, I live in a house provided as part of my compensation.)  I then divide the three major categories into the following budget categories and sub-categories.

Spending

Utilities

Electric Bill

Cellular Bill

Telephone Bill

Satellite Bill

Medical

Medical Bills

Medicine

Child Care

Daycare

Baby Sitters

Food

Grocery Store

Eating Out

Entertainment

Family Nights

Miscellaneous Spending

Clothing

Automobiles

Gasoline

Routine Maintenance

Saving

Retirement

Roth IRA 1

Roth IRA 2

Education

ESA 1

ESA 2

ESA 3

Automobiles

Automobile 1 Replacement

Automobile 2 Replacement

Automobile Repairs

Home

Furniture Replacement

Appliance Replacement

Future Home Purchase

Insurance

Automobile Insurance Premiums

Disability Insurance Premiums

Renter’s Insurance Premiums

Additional Savings

Giving

Church

Tithes

Offerings

Special Offerings

Gifts

Donations

Presents

Basically, I have 15 budget categories, with most categories broken down in to two or three sub-categories.  (Once in a while, I’ll add an extra category or two, depending on circumstances.  For instance, for a long time, I was saving for a new lawn mower, so there was a specific savings category labeled lawn mower.)

For me, and my family, it works best if we limit our number of budget categories.  I find that this makes things a bit more manageable – and more user-friendly.  (If you have irregular income – and most folks do – I suggest you read this post:  How To Create A Budget If You Have An Irregular Income.  You’ll find information for setting up a budget, even if your month-to-month income fluctuates.)

What About You? -

I’d love to hear from you, my awesome readers.  How many budget categories do you use?  Have you found that you like a super-simple system, or do you prefer something much more complex?  Leave comments here and / or connect with me via Twitter.

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What Works For Me – Budget Categories

There are thousands of websites and hundreds of books about debt reduction and debt reduction techniques.  Personally, I’ve written several articles about my own debt reduction journey, a comprehensive guide covering how to get out of debt, and I’ve even created my own personal debt reduction method.

Today, I thought it might be beneficial to look beyond the methods and techniques, and really think about what keeps a debt reducer motivated.

What Works For Me – Debt Reduction Mindset

I like to keep things simple, so I like to focus on one debt at a time.  After listing my debts, and paying minimums to all creditors, I then spend my time trying to reduce the balance of the first account on my list.  As soon as I eliminate the first account, I’m pumped to move to the second account.  Focusing really helps.

I think it’s important to build community around a goal.  I like for my wife and I to be on the same team, and of one mind.  In fact, it would have been impossible for us to get out of debt, if my wife and I had not learned to communicate and work together.  We also surrounded ourselves with positive people and friends who would not cause us to stumble.

I find that I need to set an example of restraint and frugality.  It’s relatively easy to create a budget.  It’s a far more difficult thing to stick to a budget.  As a parent, I know that my kids are looking to me for advice, encouragement, and wisdom.  The sacrifices that I make today will pay big dividends in the future.

I have learned to eliminate the noise and listen to just a few, trusted voices.  Instead of trying fifteen different debt reduction techniques, or looking for a quick fix to my debt problem, I sat down, created a plan, and followed the plan.  I never pay attention to gimmicks and get-out-of-debt quick schemes.  Instead, I focus on paying the bills that I owe and following the plan that I have created.

I celebrate every success, big or small.  My wife and I have learned to celebrate our financial successes – without spending a lot of money.  We enjoy a date night or take the kids out for a day at the park.  I make a big deal out of our goals – and an even bigger deal when we achieve them.

I admit that I am human.  Here’s the reality.  Even though thousands of people visit my site each month (which blows my mind), I’m still prone to the occasional mistake.  When dealing with a setback, it’s important that I regroup, remember why I started the process in the first place, and move forward.  Even when I missed my original debt reduction goal date, I kept going.

What About You? -

I’d love to hear from you, my awesome readers.  What keeps you motivated?  What steps have you taken to keep your mind in the game?  Have you slacked off, but decided to get going as of today?  Leave comments here and / or connect with me via Twitter.

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What Works For Me – Debt Reduction Mindset

I have three checking accounts – a primary checking account at our local bank, a business checking account with the same bank, and an online interest-bearing checking account with ING Direct.  I also have an online savings account, also with ING Direct.

Click here to read about how I use these four accounts to manage the flow of my money.

Right Now -

I’m pretty satisfied with my current setup.  My primary checking account is a joint-account that I share with my wife.  We only write a few checks each month, so we rarely have to purchase checks.  The account is free and doesn’t require a minimum balance.

Transferring money to and from ING couldn’t be easier, and their customer service is second-to-none.  I’ve been and ING customer for more than eight years and I’ve never had a problem.  There are other online banks that offer slightly higher interest, but I’m hesitant to leave ING.  I’m impressed by the fact that I can get a real person on the phone when I call them.

The business checking account is my most rarely-used account.  I’ve set it up so that any business-related income is automatically deposited into my business checking account.  If I need to access the money in the account, I simply initiate a transfer, from business checking to my personal checking account.  I only do this four or five times a year.

Possible Future Improvements -

As I stated before, I’m actually pretty happy with my current system.  That being said, I do see some room for (possible) improvement.

First, it wouldn’t be a bad idea to look for a free primary checking account, from a local bank, that would be interest bearing.  (Interest bearing simply means that the bank pays interest on any money deposited in an account.)  My wife and I do not have access to direct deposit from our employers.  So, it’s absolutely necessary that we have access to a local bank branch.  If we did have direct deposit, I would simply have our checks deposited with an online interest bearing account, and be done with it.  As it is, deposits must be made manually.  We live in a rural area, and the banking options are somewhat limited.  I’m always on the lookout for a better primary checking account.  If I see one, I just might make a switch.

Second, I might want to think about finding an online bank with higher interest rates.  One of the best sites on the web for finding interest rate information is Bank Deals.  I’ve visited Bank Deals dozens of time, and almost pulled the trigger and opened a new account.  Right now, I’m really focused on rebuilding my emergency savings.  Once I’ve fully rebuild by savings, I might consider a little rate-shopping.  We shall see.

Finally, it might be smart to open an account with a local credit union.  At some point in the (distant) future, I might want to borrow some money to buy a home.  (My current plan is to pay cash for a new home, but plans can change.)  I’ve heard from several close friends that it’s a good idea to have a relationship with a local credit union.  Again, it’s something about which I should think.

What About You? -

I’d love to hear from you, my awesome readers.  How many checking / savings accounts do you have?  What’s the perfect system?  Do you and your spouse use a joint account, or do you have separate accounts?  Leave comments here and / or connect with me via Twitter.  Those who are reading this via RSS or Email should click this link to visit the site and leave a comment.

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What Works For Me – Checking And Savings System

Before you create your next budget or monthly spending plan -

1.  Track your spending for one month.

Use a spreadsheet, pen and paper, or online software, and track your spending for one month.  Track all payments – including those made by check, debit card, cash, (and credit card, if you choose to use one).  Remember to also include any payments that are automatically withdrawn from your checking / savings accounts.  (My wife and I use the You Need A Budget software to track our expenses and manage our monthly budget.)

2.  Create a detailed list of non-monthly bills / expenses.

Remember, for a budget to really work, you need to plan for non-monthly (irregular) bills and expenses.  For instance, you may need to pay annual life insurance premiums, twice-yearly automobile insurance premiums, and property taxes.  These bills do not arrive in your mailbox each month, but they still need to be included in your budgeting plans.  Click here for several options for how to deal with annual / irregular billing cycles.

3.  Open a free checking account with free online bill pay.

I could not manage my finances without a free checking account and free online bill pay.  Instead of writing several checks a month, I can go online, schedule payments, and be done with paying bills in a matter of minutes.  It helps to bank with an institution that integrates with your budgeting software of choice, or one that allows you to download transactions in several different file formats.

4.  Open a savings account.

I use an online savings account – one that allows me to quickly transfer money, via it’s transfer system, to and from my online checking account.  (If you would prefer one account, consider an interest-bearing checking account, like the ING DIRECT Electric Orange Checking Account)  You need an account where you can earn interest, while temporarily saving money for non-monthly bills / annual expenses.  I happen to have three accounts – a checking account at a local bank for day-to-day transactions, the Electric Orange account for online bill pay, and the online savings account for stashing cash until annual bills are due.

5.  Consider a cash-management system that will work for you.

I am comfortable carrying cash, but some may not be.  Find a cash-management system that you like and use it in connection with your budget.  My wife and I us the envelope system.  (Click here to watch a video tutorial, outlining how we use envelopes to manage our cash.)  You may choose to use a debit card, or even write checks, instead of using cash, but be sure you have some sort of system set up that helps you account for how much cash you need and spend.  Learning to properly handle cash, without wasting it, is one of the first steps in the life of a maturing home-finance manager.  Stop using the excuse that you “spend more with cash”.  If you can learn to be responsible with the $20 in your wallet, you can learn to be responsible with the $200,000 in your retirement account!

6.  Establish a budget-creation routine.

Determine when you will create your monthly budget.  Determine when you will discuss the monthly / weekly budget with your spouse.  Be specific and write the date / time on your calendar.  Instead of paying bills “whenever you have the chance”, build some time into every week for handling personal-finance related chores.

7.  Balance your checkbook / reconcile savings account.

It almost goes without saying, but before you can create a budget, you need to know how much money you have on hand.  Also, consider taking a look at any other accounts you might have – retirement, education savings, etc. – just to make a note of current balances.

8.  Determine your next financial step / goal / plan.

If you are trying to build an emergency fund, you need to have an emergency fund category in your budget.  If you are trying to get out of debt, you need a debt reduction category in your budget.  If you are trying to fund your Roth IRA, you need a Roth IRA category in your budget.  You get the picture.  Also, remember, after you get out of debt, you can then remove that category from your budget, and replace it with some other category.  The point is – Incorporate your current goal within the budget.

9.  Prepare yourself to succeed (and fail).

If you have never lived on a budget, prepare to be amazed by how in control you will feel, once you start using one.  Also, be prepared to fail, and feel frustrated, once your “perfectly” detailed plans fall completely apart.  The truth is, none of us can tell the future, but we can make some pretty decent predictions, based on past expenses.  For some, budgeting is easy, and becomes easier.  For others, budgeting can be a struggle, and it takes time to find the groove.  Be patient and enjoy the process!

10.  Understand how to budget with irregular income.

For most people, even those with regular monthly income, it’s a good idea to learn how to budget with irregular income.  For instance, most will need to know what to do with year-end bonus or a tax rebate check.  For many, especially those who work on commission, it’s critical to learn how to budget when on an irregular income.  Click here to read an in-depth article about how to create a budget when you have an irregular income.

I have used the above when creating my own budget.  My wife and I have been living on a budget for more than four years.  I will remind you, I am not a financial planner, and the above simply outlines what works for us.  Before making any financial decisions, consider consulting a qualified financial adviser or planner.

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10 Things To Do Before Creating Your Next Budget