Most of us think that keeping one savings account is enough to cover the emergency expenses. However, keeping multiple savings account is important to track how much you have saved toward your each savings goal.
You’re setting aside money every month, which is good, but the money you are saving is not helping you to achieve your financial goals. Therefore, you need to have multiple savings account for each goal.
Here are the 6 reasons why you should keep more than one savings account.
1 To achieve multiple savings goal
As already mentioned, if you are trying to achieve more than one financial goal at a time, you have to keep multiple savings accounts.
For example, you need to have a savings account where you can save for a down payment on a house, the other savings account is for an annual family vacation, and the 3rd savings account is for an emergency fund, and so on.
2 Earn more interest
Keeping multiple savings accounts in the different banks can help you to earn good interest. However, you will have to save money in the savings account for a long time to get this benefit.
3 Be organized
Saving money is not easy; you have to stick to your plan to save enough dollars.
You have to allocate your specific savings account to each financial goals rather than saving lump sum in one account.
Keeping multiple savings account will help you stay organized when it comes to achieving financial goals.
4 You can prioritize your financial goal
You have to prioritize your financial goals. Keeping separate savings accounts can help you to prioritize them.
For example, if you want to plan a vacation, you need to save a certain amount required for the trip.
5 You can easily organize a budget
If you have multiple savings accounts, you can easily plan a monthly budget. You can figure out how much you need to save in each account every month. Thus, you can create the budget accordingly.
6 You can have a hassle-free financial life
Most of the people have one savings account and they tend to spend their money more freely.
Thus, they fail to achieve their goals.
Robert Laura, president of Synergos Financial Group in Howell, Mich. has said, "Save early, save often and save automatically, says withdrawal at your bank, so you’re not tempted to spend the money".
Lastly, automatic withdrawals from checking accounts to savings accounts will not cost you money. They are usually fee-free.
However, you can ask your bank regarding the fees. Remember, some banks need you to keep a certain amount of money in your account at all times. Online banks also offer you to open multiple accounts.
You can easily move money from checking account into savings. However, transferring money can take some time.