Once you reach adulthood, your parents might have urged you to open a bank account for your savings and daily income. Having a bank account makes managing money more effortless than carrying checks and traditional piggy banks.
Banks provide security for the safety of your money. With the surge of online shopping, online bank transfer to pay bills and expenses is much more convenient. A lot of establishments also offer ATMs for you to withdraw money easily. Opening bank accounts are also cheaper than other money account holders.
It would be best if you didn’t miss out on the benefits of opening a bank account. Opening multiple accounts offer many advantages so that consumers do not worry about money too much. But, how many savings accounts should you open? One or two?
Having multiple accounts aid in meeting several financial goals as it creates boundaries and sets financial freedom. It helps distinguish what each allotted budget is for each respective reason. You may open a bank account for your student loans, another for monthly expenditures, and one for your savings.
Multiple accounts also provide you access to different unique features. It allows you to have added protection for your money. Numerous bank accounts may be advantageous, but managing each bank arrangement can be confusing and intimidating. Don’t fret!
Here are a few tips on organizing your finances with multiple savings accounts.
1. Make a tracker for each account
It’s inevitable to forget significant numbers and passwords with multiple bank accounts. To avoid mental difficulties, have a tangible tracker to monitor each bank transaction. You can create a spreadsheet for each account using finance tools and software. A physical notebook may be for you if you worry about online breaches.
Money is a serious matter. So, if you need to be business-like in all your transactions, then be a businessman. In your tracker, log in each date of transaction, and amount of money withdrawn and deposited, and even attach receipts for proof and reference.
A spreadsheet helps you manage accounts more efficiently as it creates a better visual perspective. It also aids you in becoming a more responsible borrower as you know the critical dates and information. In doing so, you get to strategize your financial goals.
2. Open accounts from different banks to have access to various benefits/features
Different banks have different features to cater to a diverse customer base and increase competition. Some bank accounts may provide debit cards with additional benefits such as improved cash withdrawal limits, reward points, zero transaction fees, exclusive cashback on qualified purchases, and privilege discounts.
Open your account with the bank that suffices your financial needs. Take advantage of this and maximize the benefits by opening accounts from various banks. For example, if you hit the withdrawal limit on one of your bank’s debit cards, you can utilize the credit card associated with your second savings account.
Once you have opened accounts at multiple banks, monitor them effectively through trackers and spreadsheets. Have a system in place to manage them and avoid inactive accounts. Dormant accounts are usually the primary targets of fraud.
3. Write out your financial goals and see how many accounts you need
There’s no limit to the number of bank accounts you can have, but having 20 accounts is too much for one person to handle. Indeed, having multiple accounts offer many advantages. However, having too many accounts also warrants potential financial risks and dangers. There’s a heightened risk of overlooking fraudulent activity in a savings account.
Find the best deal to maximize the earnings of a single bank account. Thus, it’s crucial that you only have a specific number of bank accounts to cater to your needs. You can do this by listing and visualizing your financial goals and basing the number on this list.
Separate your needs from your wants. Have a separate account for your finances, such as emergency funds, house rent and repairs, car maintenance, and school loans. You should allocate another savings account for materialistic wants such as vacations and personal splurges like bags and clothes.
This separation helps you visualize which dollar goes to which account without managing too many accounts. Prioritization of needs and wants is vital in the peaceful organization of bank accounts.
4. Set a primary account
Although separating allocated budgets into several bank accounts is crucial to the financial organization, it’s also essential to have a primary account where most of your money flows in and out. The most significant aspect of your principal checking account is that it keeps the money you mostly use during the month.
Your primary account should hold your central salary and carry a significant portion of your money. You should utilize this account for immediate financial payments and concerns. Then, to fulfill specific financial objectives, consider opening a second checking account and transferring the money from the primary account to your second account.
Make sure you set your primary account to a bank that best suits your monetary needs. You can enjoy online and offline bank transfers with your primary bank account without incurring too much interest. But before opening other accounts, ensure your primary account enjoys the essential bank benefits.
Indeed, there are numerous benefits to having many accounts, such as segregating your goals, monitoring spending, and reducing bank interest rates. However, opening too many accounts also has its dangers and cons.
If you’re considering opening numerous accounts, we should warn you of the following cons. Managing and organizing multiple accounts takes a business-like approach and would require a significant portion of your time and effort. There are also fees for monthly service and minimum balance, which would defeat the purpose of opening multiple accounts.
Most importantly, there’s an increased possibility of overlooking and missing fraudulent conduct, overcharging, or duplicate charging with too many accounts. Despite all these cons, you can efficiently open multiple accounts with proper management and organization and gain benefits. Hopefully, the tips above can aid you in your financial journey.