What Is An Account? (E) Rated

While it is very possible you’ve heard the term Account before, I thought I’d take a minute to explain just exactly what an account is. If you go out to your favorite search engine, you’ll likely find something that talks about assets, liabilities, and ledgers. I find myself thinking about lions, and tigers, and bears oh my as I write this. If you’re familiar with assets, liabilities, and ledgers, that’s great! I’m guessing most of those words don’t mean a whole lot to you thought. Don’t worry, I plan to cover those in future posts.

An Account these days is a place, typically facilitated through a bank, that has a unique number, where you can put money in or take money out. You can access your account through an app or webpage to see what you’ve put in and what you’ve taken out. While there are a variety of different accounts (e.g., checking, savings, retirement, mortgage, credit card, etc.), generally speaking, they work pretty much the same. More to come on different account types in future posts…

Let’s Relate

an Account to something a bit more…interesting. I have a bar in my basement. My bar is unique (set up specifically to my tastes) and is a place where I can put things in and take things out. At first, my bar was empty – kind of like when you first set up an Account. It didn’t take long for me to stock my bar though. I made sure the staples like gin, vodka, whiskey, and bourbon were there. I also rounded it out with wine, beer, mixers, and some typical bar supplies. Me stocking up my bar is like adding money to your bank account. Maybe you have a day job and a side gig and money comes into your account different ways (like adding vodka and beer to my bar).

Ok, so my account, I mean bar has something in it. Now, I go to work, have a horseshit day and decide to make a withdrawal, or take something out, of my bar when I get home. Gin and tonic has been the go to lately. Me pouring that gin and taking is like you taking money out of your account to pay a bill. I bet you don’t feel as good paying that bill as I do after finishing up my perfectly prepared gin and tonic!

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You have to give these socks a try!

So,

no need to get overwhelmed thinking about assets, liabilities, and ledgers. Just think about money going in, money going out, and keeping track of it all. An account is just the place that all of these things happen. Remembers, I’ll cover different types of accounts and why you may want say, a checking account and a savings account, but for now, let’s keep it simple. Stay tuned for additional Unmuddling Money posts that aim to simplify (and add some humor) to otherwise complicated and boring money topics!

Looking for bar supplies? Check this out!