Scott Pape - The Barefoot Investor

Finally, you should have one bank account completely separate from your day-to-day banking.

I'm talking another financial institution altogether.

Why?

Because I want to make it hard-ish to get at this money. This account will become what I call your ‘Mojo’.

The aim of the Mojo account is to get your Mojo back, baby. So you don't have to stress about money like everyone else.

So what is it?

Well, it's not a redraw facility. It's not shares.

It's cold, hard cash in the bank.

And it's hard to access. You see, managing your money is about behaviour.

Most people shuffle money around from one account to another without ever actually saving any of it.

Now, the number one question people ask me about Mojo is this:

‘Barefoot, can't I use my offset account for my Mojo?’

My answer?

It's not how I did it, but sure, you can if you want. The most important thing is that you do it!

Back in 2016, my Mojo account was a UBank USaver (UBank is NAB's ‘Jetstar’ brand).

You know the drill: zero fees, good interest. Google it.

No prizes for guessing the nickname this time: ‘Mojo’.

As I've said, I deliberately keep this account separate from my day-to-day banking because I don't want to be tempted to spend it. It's for emergencies like, say, your house burning down. And it's a good feeling knowing that you have a separate pot of money that can be your ‘get out of jail free’ card when you need it.

When I had a mortgage, I was given a ‘professional package’ by the bank, which included a credit card (I chopped it up) and a basic bank account.

If you have a home loan, you've probably got a professional package too. Everyone gets one. It's a marketing gimmick designed to flog you as many high-cost products as possible.

I tried to screw down the same deal with my home loan provider as ING's zero-fee, high-interest-earning banking (and zero international ATM fees). They just laughed at me. So I made ING Orange Everyday my ‘Money HQ’ and organised a direct debit to my home loan.

Simple.

Right, I've mentioned a few accounts so far, but maybe it's not quite clear in your mind. So I'm going to put it all together on a ‘menu’ for your Barefoot Date Night …

If you've just picked up this book and it's 2027, perhaps ING and UBank aren't around anymore. It doesn't matter — they're just examples. The same rules apply: no fees. Ever. Always use internet banking (or whatever it is you call the internet now). And always get high rates of interest on your savings .

Choose somewhere really fancy for your very first Barefoot Date Night.

Trust me, you can afford to splurge — you're about to save yourself thousands of dollars in just 10 minutes.

Whip out your phone and apply for:

2 × everyday transaction accounts — call them ‘Daily Expenses’ and ‘Splurge’ and get an ATM card for each (it's easier if you get your ‘Daily Expenses’ card first, then simply open another account for ‘Splurge’)

2 × online savings accounts — call them ‘Smile’ and ‘Fire Extinguisher’ and link them both to ‘Daily Expenses’.

The entire process takes 10 minutes and can be done on your phone between entree and main course.

Next, I want you to apply online for:

1 × online savings account with a different institution — call it ‘Mojo’.

When you open your separate Mojo account, I'd like you to set it up with an initial $2000 deposit . And if you don't have a spare $2000, look around your house and see what you can flog on Gumtree.

I'm dead serious.

Make it your mission to get $2000 in Mojo. It's a great kick-off for what will become the most psychologically important account you ever create. When you have Mojo, you don't have financial emergencies.

It's time to get on the fizz. Have yourself some champagne (glass, or bottle).

You've earned it: it's not every day you save yourself from paying off some wanker banker's BMW.

And it's only getting better. On next week's Barefoot Date Night, I'm going to show you how to make up to $226 484 by screwing down an amazing deal on your super.

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