How Multiple Savings Accounts Help you Reach Your Financial Goals
At this point, it’s common knowledge that a savings account is the best place to store money you’re putting aside for a financial goal. What you...
If you ask the average person how many savings accounts they need, the answer is likely to be, “one.” That’s a logical answer. After all, barring different interest rates, why would you need more than one savings account to store your money?
Actually, having multiple savings accounts can be very effective. Here are some of the ways you can use them to kick your financial game into overdrive.
If you have some financial goals in mind, having multiple savings accounts are a good way to measure your progress. After all, it’s hard to tell how much you have saved for a new car when you’re also putting aside money for Christmas gifts in the same account.
If you have a separate account for both a new car and Christmas gifts, on the other hand, you can see how much you have saved for each goal. Even better, you can choose which goals to prioritize. Many financial institutions, like First Alliance Credit Union, allow you to name each of your accounts, making the process even easier.
If you get your paycheck by direct deposit, you can usually automate transfers to each different savings account you have. This is especially useful when you use the “envelope” or “bucket” method of budgeting and set up multiple accounts that correspond to each category of your budget.
We’ve all had that sinking feeling in the pit of our stomachs when we realize we’ve overdrawn our account. Even worse are the overdraft fees your financial institution will charge to resolve this matter.
If you keep multiple savings accounts, though, you can designate one of the accounts to be the one you use for electronic payments. Then, before you make an electronic payment, just transfer the funds into that account.
If multiple accounts are a great idea, the question that logically follows is "How many savings accounts should I have?"
There’s no one-size-fits-all answer to that question, but there are some good guidelines.
As we mentioned before, if you’re using the “envelope” method of budgeting, you can set up as many savings accounts as you have budget categories.
You can also set up savings accounts for the following items:
Having multiple savings accounts is a good money move. It’s a great way to stick to your budget, increase your financial stability and keep track of your financial goals.
If you want to know more what other good money moves you can make, schedule a free consultation with one of our money navigators today. They’ll help you plan out your next moves and help set you on the path to financial success.
At this point, it’s common knowledge that a savings account is the best place to store money you’re putting aside for a financial goal. What you...
Many people have discovered the benefit of having multiple bank accounts. They can help you organize your finances, stick to your budget and even...
Here’s a fun challenge–visit the savings account page of a credit union’s website, including First Alliance Credit Union, and look for find money...