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Bank Like the Wealthy, it Saves Money!

Bank Like the Wealthy

For most of us it seems like every day we make more money, but with that money, we are just as poor. A 2017 study recently found that over 78% of people in the United States live paycheque to paycheque. Even 10% of people making over $100,000.00 a year live paycheque to paycheque! How, you ask? They don’t manage their money like the wealthy do. I do! And I’ll show you how you can too!

What do I mean by “bank like the wealthy”? Well for most of us, money flows in a very straight line. We get paid for our 9-5 job. That money goes into our bank account. We spend the money in our bank account on rent, food, gas, dinner’s out, everything! It all lives in one account until the next payday, then we do it all over again, ad infinium.

The wealthy do it differently. Here’s how.


The first difference between the average and the wealthy is income streams. The average millionaire has 7 different streams of income coming into their account! 7! Whereas the average individual only has one. Because of all of this excess revenue coming to them the wealthy have to treat it differently and organize it well, lest it is lost in the shuffle of day-to-day life.

so if you want to bank like the wealthy, you first have to get started earning like the wealthy. Diversify your income and grow it. Don’t tie yourself down to one job, or, at the very least, develop another string of income so that, should anything happen with the primary job you’re not stuck penniless.


The biggest thing the wealthy do different is budget reliably and budget smartly. This means developing a budget you can actually abide by in the long term, while still maintaining your quality of life that you’ve become accustomed to.

When we first develop budgets we all have a tendency to see the best in ourselves and believe we can live on less than we can. But the wealthy know how much they can spend, and how much it takes to live and budget based off of that.

Personally, I found the best way to budget is to take it piece by piece. This month keep track of every transaction you do and at the end of the month sit down and consider what could be removed. If nothing can be removed (that’s usually not the case, but you never know) think about what can be reduced. Do you eat out 4 nights a week? Try cutting it down to 3. Do you smoke a pack a day? Try cutting it down to 3/4 of a pack. Then the next month look at it again and take small pieces off again. Cut eating out down to 2 days a week, then 1.

Developing a budget this way will ensure that you don’t feel overwhelmed with cutting everything out of your life at once, as many people tend to do and allow you to live within a sustainable budget long-term.

Separate Accounts

The wealthy manage their money in their bank accounts different than the rest of us, and personally, I find it the hardest obstacle to managing money like the wealthy. It takes an enormous amount of forethought and budgeting to accurately use your bank accounts to their maximum potential.

Regular Accounts - Bank Like the Wealthy

This is how most people manage their financial accounts. You’ll notice there are only 3 accounts. Chequing, Savings, and Investment. For most people, this is familiar, simple, easy to manage. So how do the wealthy differ?

Wealthy Accounts

This is how the wealthy manage their accounts. Each account is for a separate purpose, from taxes to savings, to rental expenses. So let’s walk through this together and at the end, I’ll tell you why this technique works so well.

Money into a business - Bank like the wealthy

So in the beginning, your money comes in, much the same as everyone else, but a lot more of it. For the purposes of this example, we’ll assume they made $10,000.00 this month. You’ll also notice that the account it comes into is that of a business. As a business, you are entitled to a lot more tax write-offs, in both Canada and the United States, reducing your year-end tax bill significantly. So if it is at all possible for you, have the money come into a business centred account.

Save Before Spend - Bank Like the Wealthy

Here we notice the first change. Before any money, even a penny, is spent the wealthy put aside money to grow and put into savings. This number will depend largely on you and how much money is coming in compared to your budget but I wouldn’t recommend saving less than 10%. For the purposes of this example, we’ll say they save 20%. So $8,000.00 would go onto the personal side, and $2,000.00 would go onto the saving side.

Let’s start by looking at what happens on the personal side.

Initially, this looks very similar to the average person. The split of personal money goes between spending money and saving money. But it’s what the wealthy do with their spending money that really sets them apart.

How the Wealthy Split Spending

This looks much different from the average person, myself included. Normally our personal money just gets dumped into one chequing account that we make all of our purchases from. For the wealthy even their personal money gets broken down further, ensuring that you have the correct amount of each budget and holding yourself accountable, ensuring you don’t overspend, hopefully leaving you with a surplus each month. This surplus then gets rolled into the next month’s money, growing it, and the cycle repeats.

Similarly, the savings side is broken up into each individual budget. I have only shown retirement and a contingency fund on this example but the possibilities are endless. Perhaps they own rental properties and they want to ensure they have enough in an account for repairs when they come up, that would be a separate expense. Perhaps they have an RRSP (Registered Retirement Savings Plan), a TFSA (Tax-Free Savings Account), or an RESP (Registered Education Savings Plan) for their kids. All of these get some of the saving money.

Basic Savings - Bank Like the Wealthy

In addition to this though, they also plan ahead for tax time, putting a percentage of their earnings away every month to go towards taxes at the end of the year.

Savings account - Bank Like the wealthy

So how can you start this? I found the way that helped me the most was to have my personal and business accounts at two entirely different banks. That way I’m not tempted to use the money I have set aside for business personally, and vice versa.

So how does my income work? Like this:

How My Money Flow - Bank Like the Wealthy

All of my money coming in goes directly into my business account. From there I remove any GST I charged on the invoice and put it into my GST Holding Account. I then put 10% of the remaining amount in the Payroll Holding account, this representing the approximate amount of tax I will owe at the end of the year. Lastly, I put $60.00 into my Marketing account, accounting for the money I spend every month on advertising, newsletters, etc.

From the money left over, I pay any bills I may have that qualify as write-offs for my business, such as my cellphone, Dropbox, internet, etc. Finally, I leave $100.00 in my business account to cover any miscellaneous business expenses I may occur, such as fuel, USB sticks, etc. The rest gets transferred to my personal account, where it sits in my chequing account until it gets spent.

So why should you separate your accounts? There are many benefits. The biggest one for me is helps you stick to a budget. When every dollar is accounted for it’s easy to tell when you;re overspending. It’s also easier to build savings since you budget off of the 80% remaining, versus thinking about savings last.

No Fees!

This is probably the easiest difference to make to your banking today. If you’re still paying fees to hold your money in a bank, stop that! Why should you have to pay every single month for someone else to hold your money? It’s just throwing it away, especially with all the free options out there. Some banks even pay you money in your chequing account!

I have included a list below of some banks in Canada that offer free chequing accounts.

Free Chequing Accounts - Bank like the Wealthy

I personally use Tangerine and I would highly recommend them. They are super easy to set-up and they have a free transfer option if you don’t want to e-transfer. If you decide to use them feel free to use my orange code:


and we’ll both earn money back.

It should be noted that these are not all of the free chequing accounts. For example, when I was a student I banked with CIBC and I got free banking including e-transfers for my entire student career, although I would advise against them. You can also check out your local credit unions. A credit union near me actually offers free banking including e-transfers to everyone under 25. So keep your options open, but definitely make sure to dump those fees ASAP!

Wealthy Colleagues

Finally, the last major difference between how the wealthy handle their money and how the average person handles their money is that the wealthy are friends with the wealthy. This may sound like an impossible goal to shoot for but really what it comes down to is this. As Tim Ferriss said, “You are the average of the five people you most associate with”. So pick your friends carefully. If you have one friend who is terrible with money (and we all have that friend) may hang out with them sparingly, or in non-money related areas, and instead focus of those of your friends that are more successful and better with money to encourage you to improve your own life.

Now go get started!


P.S. If you haven’t seen where this whole thing started to check it out here and then check out the first blog post ever here!

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