The Usefulness of Bank Accounts

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Putting money in traditional bank accounts is equivalent to stuffing it under your mattress. Mattresses are fine, but they won't grow. However, both checking and savings accounts still have a useful role in the highly-automated but still human (read: emotional) financial life.

My checking account is part of my software secretary. My bank automatically sends checks to pay my rent, phone bill, and all my various dues to professional organizations. I just check the amounts of the dues when I get an email to make sure organizations haven't raised them, and then I just forget about it.

Savings accounts are tools to protect and manipulate money for small recurring expenses. I have several small or medium expenses each year that I distribute over twelve months. For instance, I pay $150 for an NCBC membership every January 1, and the rest of the year I set aside $12.50 each month to distribute the cost. To protect this money from myself, I send the monthly total for all these small expenses (monthly total for all my annual dues, annual renter's insurance, car insurance paid every six months, etc is $688) and use direct deposit to siphon that off my paycheck and place it into my savings account. Then, the bank automatically transfers a certain amount out of the savings account and dumps it into the checking account, from which dues (etc) are automatically paid.