The 5-3-1 Money System

Set yourselves up with a money system that works.

You thought you were doing the right thing when you combined your bank accounts. But since then, you’ve tried to track your spending and set some money goals, and the biggest result has been more stress. Was it really worth it to merge your money?

The short answer is this: yes. It is worth it. The transparency and trust you gain by doing money together are huge investments in your relationship satisfaction down the road.

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But doing money without a money system doesn’t lead to great things. A complicated system doesn’t help either. The easy-to-understand 5-3-1 method will allow you to turn chaos into order.


What it is:  The 5-3-1 system is based on a simple equation.

Start with your take home pay and subtract your regular, recurring commitments. What’s left is one spendable balance.

Spendable Balance Formula

Before You Begin: Think of your expenses as fitting into five different buckets: Giving, Bills, Debt, Saving and Spending.

5 Money Buckets

Giving: The amount you and your partner want to give to church and other charities.

Bills:  Recurring monthly bills.

Debt: Credit card and student loan payments.

Saving: Emergency savings and other savings goals.

Spending: Everything that’s left. (Groceries, gas, parking, clothing, etc.)


What you need: Three different accounts.

Three Bank Accounts

Checking Account #1: For your recurring, monthly commitments.

Savings account: For your savings ONLY.

Checking Account #2: For daily spending.


What to do: After you have your accounts set, it’s time to put the “take home pay – committed = spendable” equation into motion. Your first step is to automate some of that committed money.


Use Your Savings Account to Get to the Big Goals: Create an auto-deduction from each paycheck that goes directly into your savings account. Make sure you’re depositing enough each month to reach those savings goals. With automation, you won’t even have to touch it, which is great—because then you won’t spend it.

Use Checking Account #1 to Set it and Forget it: Create an auto-deduction from each paycheck that goes directly into your checking account. Make sure you’re depositing enough each month to cover all of your recurring expenses.

These are the expenses that you can predict and plan for, since they come up regularly. Your phone bill, your mortgage, your giving. When possible, set up automatic payments. If you give on a regular basis, protect that priority by automating it. If you have a car payment, a house payment, a utility bill— automate it.

All of the expenses from your Giving, Debt and Bills buckets are represented in checking account #1.

At this point, your commitments are taken care of. Now, you can focus on your one spendable balance.

One Spendable Balance

Gas, Groceries and Other Good Stuff: The balance of this second checking account is the one you and your partner will manage together.

All of your variable spending expenses, like groceries or gas or clothes or entertainment, are paid for from this account.

Your priorities are already taken care of. If there isn’t enough left in this account to buy things you will need, like groceries and gas, you might need to go back to your other commitments and make a few adjustments. But managing this balance should be less stressful. Your other spending commitments are already covered.


How to Keep the Good Stuff Good: The main thing you have to do with this balance is talk to each other about how you’re managing it together. Discuss how you want to handle the little micro-budgets within your one spendable balance, like take-out food or entertainment, and then decide who will do what to keep it on track.

Do you tend to overspend at Target® or Costco®? Limit yourself to a certain amount of money by putting it onto a reloadable gift card—and agree that when it’s gone, it’s gone.

Do you need your own little bit of fun money to spend guilt-free every month? Put it in your plan.

With a spending system like 5-3-1, you get to let go of the stress and worry that can surround your relationship and money. You will have to do a little upfront work to set up your system, but once you do, it’s done!

To set up your 5-3-1 plan digitally, try Fulfill. Use the beta code loveandmoney to get started.