One of the best ways to manage your money is to set up separate accounts for each of your savings goals. For instance, if you want to save money for a house, set up one account earmarked as your house fund. The only money you put in that account is for saving for your house. Other accounts you might want to set up include an emergency fund account, a Christmas fund account, and a travel account. There are plenty of basic bank account options available to set up your accounts.
Benefits of Separate Bank Accounts
You’ve probably lumped all of your savings together before instead of separate accounts. You know how easy it is to spend money set aside for one goal because all of the money is together. By keeping the money separate, you lessen the chance of spending money set aside for another goal.
Another fabulous benefit of having separate bank accounts, besides making it easier to save for your goals, is that you can also protect your funds. For instance, take your travel fund. If this fund has its own debit card connected with it, you can use it when you’re on vacation and just tap money from that account. (This is also a great way to make sure you don’t overspend.)
If your debit card is compromised for some reason, only your vacation fund account is at risk, not your standard account that you use to meet your monthly bills. While it would be damaging to have your account compromised, if ONLY your travel fund account is affected, you’re in much better shape than if the debit card was connected to one account that held all of your money.
What to Look for When Setting Up Multiple Accounts
When searching for an account, try to compare bank accounts online. You may be surprised to see how much bank fees can vary. Remember, you want to find a bank with no or limited fees. If you have 5 different bank accounts set up and you’re paying fees on each of them, the amount of money leaving your account can add up quickly. If there are no fees, you can keep more of your money for your goals.
In addition, make sure if you’re using an online bank account that you can access the money easily, within a few days.
Having separate accounts set up for your various financial goals may sound like a pain, but once they are set up, those accounts will likely make your money management even easier. As a bonus, your money will likely be more secure.