Budget Your Money Using Multiple Checking Accounts

My Money July 28, 2015

Like a lot of people, you may have one checking account and one savings account, using the checking account for expenses and the savings account for general savings. But having more than one checking account is an idea that’s catching on.

The Raddon Report says 37 percent of U.S. consumers have two or more checking accounts.  Here are some reasons why doing the same may be right for you.

Reach Your Budget and Savings Goals Sooner
Banks may issue a savings account automatically when you open a checking account. So opening multiple accounts means you’ll have multiple savings accounts, potentially making it easier to save and budget for specific things, rather than saving or budgeting in general.

For instance, you might save more when you have a separate checking/savings account for something you really want, like a down payment for a home, a car or a vacation. Maybe you want a separate emergency fund for surprise expenses, or a fun fund for purchases like concert tickets or sports equipment. “Designating accounts that you will regularly contribute to for a particular purpose, such as for a vacation or the next holiday season, will help motivate you to meet your goals by a certain deadline,” said Luke W. Reynolds, Chief of the FDIC’s Outreach and Program Development Section.

Track Your Savings Progress

Having separate accounts for each of your savings goals can make it easier to track your progress for each one. Each account’s monthly statement shows what you’ve saved toward your goal or you can check your progress anytime using online or mobile banking.

Set Up Auto Transfers
Many banks let you set up automatic money transfers from checking to savings. You can decide how much and how often to transfer funds. That way you can be progressing toward your goals without having to even think about it.

Move Funds Easily With Mobile Access

Transferring funds between your checking accounts is easy, especially with mobile access. And you can check your progress toward each of your goals whenever you’d like.

Teach Your Kids Good Spending Habits

Even if you have another system for paying bills, having separate accounts for kids can be a great way to teach them good spending habits. When kids deposit Grandma’s birthday money in their own account, or withdraw money to buy a special toy, they see how much their balance goes up and down. An account for their money can make it much easier for them to understand spending and saving.

Final Considerations
Opening and maintaining multiple accounts can be helpful for budgeting and savings purposes. However, keep in mind that there may be monthly maintenance fees associated with each account. Some banks will waive those fees if you meet certain criteria, such as maintaining a minimum balance. Be sure to understand all of the possible fees associated with an account before you make a final decision on opening one.

Visit usbank.com for more information about checking accounts.