After people learn about the money jars system, I get a few who say, “I like the idea of dividing my money up into different jars but I hate using cash.

I’m not a big fan of using cash either. To be honest, I don’t.

After the first two years of using cash, I changed my jars to digital jars. I opened up a few bank accounts when I was 18 years old (it was more like six), but it has been extremely effective in helping me reach my goals. The banker was probably like, “what is this 18-year old doing opening up a bunch of bank accounts? This can’t be good.”

Here’s how to get started. 

OPEN ONE CHECKING ACCOUNT

I encourage you to first start out using actual jars — even if you don’t like using cash. You can get started dividing up $100 or less. Physically doing the act is very powerful.

I also encourage you to get the jars if you have kids to teach them how to be smart with money. This is such a simple thing to teach your kids that when they understand it, you’ll be doing a great job as a parent raising money-savvy kids. 

After you’ve mastered the physical jars go to your bank and open up a checking account. I imagine most of you reading this will already have a checking account so you really don’t need to do anything here. 

OPEN FIVE SAVINGS ACCOUNTS

If you don’t like using cash, it’s time to transition everything online. You need at least five savings accounts (not checking accounts). Most people only have one saving account so you’re most likely going to have to speak to your bank about this.

Once those are set up, divide the money up into the bank accounts just like you would the jars. You’re WAY less likely to transfer the money out of your savings account and spending it than you would if the funds were sitting in your checking account. 

Most people are terrible savers because they try to keep a running tab in their head and then at the end of the month they tell themselves that whatever is leftover they will transfer it to savings. And guess which account never grows? Yep, you guessed it. You have to learn how to pay yourself first!

It’s important to note that legally you cannot treat a savings account as a checking account. Federal law prohibits you from withdrawing from a savings account more than six times in one month. So if you transfer the money into a savings account don’t be buying stuff out of that account. 

Think of your checking account like the hub and everything else stems from it. The checking account is like the trunk of a tree and the savings accounts are like branches. Your money comes into your checking account and the first thing you do is divide 10% here and 10% there.

I’ve never run into an issue of having to withdraw money from a savings account more than six times in one month. But it’s worth mentioning.

FIND A BANK THAT DOESN’T CHARGE FEES

This next idea is extremely important. If you have a bank that will let you open five savings accounts with no problems, you’ve got a great bank. But if you’re bank tells you, “sorry, we’re going to have to charge you to open up more than one bank,” I want you to switch banks.

What you might be thinking:

“First Scott tells me to use this budgeting system for the rest of my life, and now he’s telling me I need to change banks, is this guy crazy?” Yes, most of the “BIG” banks, Wells Fargo, Chase, Bank of America may charge you additional fees for having additional savings accounts if you don’t maintain a minimum balance, or set up automatic transfers. 

I hate paying fees. You should never have to pay a fee for having a savings account. The interest rate on savings accounts is already horrific

Here’s your script when you go to sit down with your banker and they tell you they have to charge you a fee for more than one savings account: 

Mr. Banker: We will have to charge you a fee for more than one savings account.

You: Thank you mister banker, but it’s important that I have five savings accounts and pay no fees. A bank down the road said they would do it so I guess I will have to take my business there. 

Mr. Banker: I will see what I can do.

THE BANK WANTS YOUR BUSINESS

The bank wants to keep your business and I’ve heard they will wave the fees in many cases. But, if they say, “sorry we cannot change that,” I promise there are hundreds of other banks that will. I’ve never heard of a credit union not willing to do that for you. 

I asked my credit union how many bank accounts I could open without paying fees, and they said, “as many as you would like.” I said, “really?” She said, “we have a customer who has 63 bank accounts with us and that’s totally fine.”

My bank is USAA and I’ve had a great experience paying no fees and having multiple savings accounts. I would highly encourage you to open your accounts with them if you have access to them. Most people don’t unless you or a family member is or has been in the military.

The bottom line is DO NOT PAY FEES

THIS WORKS IF YOU SPEND LESS

I already know many of you are thinking, “this isn’t possible in my situation because I don’t make enough money.” You can read ways to make more money here. However, the most overlooked way to make this system work is by spending less. 

If you’re serious about financial independence, not only do you need to make more money, you need to keep as much of it in your wallet as possible.

We’re constantly bombarded with marketing messages telling us we need to spend money to be happy. This is not true! Live simply and be grateful for what you have and you’ll be amazed how much you can save. 

Read: 8 Ways Minimalism and Personal Finance Are Related

People only spend less when they have to. Be content with what you have and look for ways to save money, you can make this system work. 

So, if you don’t like using cash, this is what I did to transition everything to digital jars.

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