Want bank accounts for your mental accounts? Try ING, says a reader.

Nudge blog reader Chris Peterson previously wondered why banks don’t let him practice mental accounting by visualizing his online checking account as separate accounts for rent, food, entertainment, etc. He calls this process, “Saving with Shoeboxes.” Banks might not be helping Peterson budget and save, but others pointed him to the software package Bucketwise. Peterson responds with a tale about leaving Bank of America, which makes holding multiple small checking accounts an expensive pain, and switching to ING.

ING Direct, it seems, allows you to open up to 25 savings accounts for free, with no fees or minimums. Plus, they have “Automatic Savings Plans”, so one could say (for example) “Transfer $100 from my paycheck to my ‘Holiday Savings’ fund every month.” Now, is this a perfect shoebox solution? Not at all. You still have to open several accounts, and you can’t easily allocate everyday expenditures within those accounts – you can only transfer money from “groceries” to “checking” to cover the expense.

Overall, though, Peterson says he’s be “very satisfied” so far. He tells the Nudge blog he’s trying to push banks to implement a full visual shoebox system and has contacted the MIT center for civic banking. If an online mental accounting feature is something you wish your bank offered, read Peterson’s letter to his bank and spread the word at yours.

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  • misterxroboto

    as a person who works in retirement planning finances, people find it surprising that i keep separate brokerage accounts through my employer (free for everyone).

    while it's possible for me to write checks against both, there's a sort of easy accounting for having money saved for long-term purposes vs normal monthly purchases.

    even the people who are supposed to experience the least hyperbolic discounting have to overcome their own bias.

  • Anonymous

    as a person who works in retirement planning finances, people find it surprising that i keep separate brokerage accounts through my employer (free for everyone).nnwhile it’s possible for me to write checks against both, there’s a sort of easy accounting for having money saved for long-term purposes vs normal monthly purchases.nneven the people who are supposed to experience the least hyperbolic discounting have to overcome their own bias.n

  • Anonymous

    as a person who works in retirement planning finances, people find it surprising that i keep separate brokerage accounts through my employer (free for everyone).

    while it’s possible for me to write checks against both, there’s a sort of easy accounting for having money saved for long-term purposes vs normal monthly purchases.

    even the people who are supposed to experience the least hyperbolic discounting have to overcome their own bias.

  • http://www.economistsdoitwithmodels.com Economists Do It With Models

    ING is interesting in that its savings accounts also used to work as a bit of a commitment device- until recently, it was super easy to set up an automatic transfer into the account, but it took a few days to transfer money out of the account into one that you could write checks off of and whatnot. I've had an ING account since 2005, and I think I have yet to transfer money out. However, in doing my research just now, I see that they have implemented bill pay and debit card functionality. As a human, I was probably better off not knowing that. :)

  • http://www.economistsdoitwithmodels.com Economists Do It With Models

    ING is interesting in that its savings accounts also used to work as a bit of a commitment device- until recently, it was super easy to set up an automatic transfer into the account, but it took a few days to transfer money out of the account into one that you could write checks off of and whatnot. I’ve had an ING account since 2005, and I think I have yet to transfer money out. However, in doing my research just now, I see that they have implemented bill pay and debit card functionality. As a human, I was probably better off not knowing that. :)

  • http://www.economistsdoitwithmodels.com Economists Do It With Models

    ING is interesting in that its savings accounts also used to work as a bit of a commitment device- until recently, it was super easy to set up an automatic transfer into the account, but it took a few days to transfer money out of the account into one that you could write checks off of and whatnot. I’ve had an ING account since 2005, and I think I have yet to transfer money out. However, in doing my research just now, I see that they have implemented bill pay and debit card functionality. As a human, I was probably better off not knowing that. :)