The Freedom Account Solves a Budgeting Problem

Mary Hunt, long time debt expert, came up with the concept of the Freedom Account and speaks about it in her book, Debt Free Living. It has been an essential component and tool within my family budget for a long time and I’m curious to get your thoughts about it.

Irregular expense savings

The freedom account is an account which is used to save money for irregular expenses which are expenses that don’t occur each month.  It’s actually not considered a savings account, but is a spending account which you regularly withdrawal money. A freedom account includes, for example, cash for christmas time, oil changes for your car, vacations and more. These are all expenses that don’t occur each month.

Solution to a budgeting problem

The Freedom Account solves a big budgeting problem in my mind. Without the planning that goes hand-in-hand with operating a Freedom Account, you’ll find money isn’t always available as these types of expenses occur. It’s common for people to forget about them until they occur at the most inconvenient time.

By planning ahead with the freedom account you’re putting yourself in the drivers seat to managing your money. This reduces stress and worry which is the idea behind the concept.

Steps to Start a Freedom Account

1.  Open a new checking account.  Note:  this can also be a budget category with subcategories.
2.  Make a list of all your irregular expenses.
3.  Determine the estimated amount for each expense on a monthly basis.

Example Expenses:

  • Christmas: $500 per year/12 = $42
  • Oil Changes: $120 per year/12 = $10
  • Vacation: $600 per year/12 = $50
  • Total Monthly deposit into Freedom Account = $102

4.  Sum all of the monthly totals to determine the amount you need to deposit into your Freedom Account each month.
5.  As you spend or deposit money track the transactions for each expense type (see below).

Track expenses

Mary suggests using a seperate sheet of paper in a freedom account notebook per expense, so that you can keep track of each expense balance within the account itself. Adding the total balance for all expense types should equal the total balance for the account.

Once you’re up and running, resist the tempation to draw money from the account to meet unplanned expenses. Pulling money out of your freedom account for non freedom expenses means you’ll lose the freedom it was intended to provide you.

Determine if this unplanned expense is regularly occurring. If so, incorporate it into your regular expense budget. If it’s irregular, add it as an expense to the freedom account and increase your deposit to include the additional expense.

Here are some expenses to consider for your freedom account.

  • Yearly pet veterinary visits
  • Church retreats
  • Children’s summer entertainment
  • Yearly food club membership
  • Birthday’s and other gifts
  • Auto maintenance
  • Yard/landscaping
  • House maintenance
  • Car inspections
  • Car oil changes
  • Car registrations
  • Vacations

What do you think about the Freedom Account?

About Jason Price

Hi, I'm Jason Price, family man saved by grace, passionate about faithful stewardship, soccer and the Pacific sun. I write about money, career and business here at

  • Catie

    My hubby and I have talked a lot about how many savings accts to have (emergency, gifts, auto, etc) but this is a great way to incorperate most of them into one!! Thanks! Great article!
    .-= Catie´s last blog ..I’m Famous! (sort of..) =-.

    • Jason Price

      Thanks, Catie. We keep two accounts for savings. We have our emergency account and also the freedom account. We use ING Direct for our emergency savings and Ally Bank for the freedom account. Both provide good high yield savings for these funds.