If you’re anything like me, you can relate to the confusion that hit me when I came across an article detailing the reasons to have multiple savings accounts. That’s right. As if it’s not hard enough to find money to put in one savings account, people actually have three or four savings accounts.
While I’m just now getting over the shock at the thought of having enough money to spread out into multiple savings accounts, when you think about it, there certainly are advantages. No matter if you have millions, thousands or even hundreds of dollars, savings accounts don’t have to be used solely for emergency purposes.
To ensure you’re taking advantage of your savings accounts, here are some reasons why opening up a couple different savings accounts might not be such a bad idea:
- Keeps track of progress. Say you want to save up for a vacation, an emergency fund and to pay off credit cards. In this instance, you’re better off having a savings account for each individual goal. This makes it easy for you to separate the money and keep track of how close you are to achieving each goal.
- Helps organize a budget. When you have multiple savings accounts, it’s much easier to create a monthly budget. When you figure out how much you need to save in each account per month to achieve your goals, you’ll be able to add them to your monthly budget.
- Eliminates hassle of big bills. People who have just one savings account tend to spend their money more freely. As a result, it’s not uncommon for them to come up on the short end when something unexpected comes along, such as an unforeseen automobile repair fee. However, if you separate your accounts, you know what needs to be in each of them and you’re less likely to use that money somewhere else.
While there are numerous reasons to open multiple savings accounts, there is one drawback. For people that struggle with organization, trying to spread out and keep track of money going to different accounts can take some getting used to. However, in the end it seems like time well spent.
If you decide to go the route of opening up an extra savings account or two, be sure to ask your bank about possible fees you may incur. Some banks require you to keep a certain amount of money in your account at all times, which may be to your advantage to avoid.
How many savings accounts do you have? Do you find it easier to have one or multiple accounts? Let us know in the comments section below!