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.