You may ask yourself, why would I want to have multiple savings accounts? That just sounds like more work.
If you think that way, you’re not alone. Most people think of savings accounts as a place to stash funds for emergency situations or for the elusive “rainy day.” But they can be more. Savings accounts can actually be a great place to put money away for larger purchases such as a new vehicle, boat, or even a home.
If you want to successfully save money for various financial goals, you may want to consider having multiple savings accounts.
Setting targeted savings goals
If you set unclear or “fuzzy” savings goals, they may not pay off. Likewise, if you don’t have targeted savings accounts, you are much more likely to dip into your emergency savings funds to make a big purchase.
Get into the habit of creating targeted savings goals. This will help encourage good behavior because they offer you a reason to monitor your spending patterns to ensure that you can meet your goals. Before you try to launch into a new savings goal, make sure you have a solid foundation. Pay off short-term debt such as credit cards. In addition, save about six months of living expenses in your emergency fund.
Once you’ve taken these steps, you’ll be better prepared to set up multiple savings accounts.
Establish automatic deposits into your savings
While you have likely been told to save early and save often, you should also add save automatically to that mantra. To make sure you are continually feeding your savings account, you should sign up to make free direct deposits and automatic withdrawals with your bank. This will help ensure that you aren’t tempted to spend the money you are trying to save.
You can also use online-only banks for multiple accounts, which allows you to easily and quickly move your money between your savings and checking accounts. There are some online-only banks that can even link to other bank accounts from different providers.
Keep track of your progress
Every savings account you open needs to have a clear and set goal. There are some reputable sites that can actually help you meet these goals and allow you to link your bank account to them. You can also use an online bank account to keep track.
Another way to keep track of your savings is by using a spreadsheet. Most banks now offer online tools to help you along the way, so be sure to take advantage of these tools to help grow your savings.
Also, review your goals monthly to ensure you remain on track. If you don’t meet a goal, make adjustments accordingly.
Making your savings a priority
If you want to save money, you have to make it a priority. Keep your eye on the prize with multiple savings accounts and you can have a higher likelihood of being successful.
The information mentioned in this article is for informational purposes only, is intended to provide general guidance and does not constitute legal or tax advice. Each person’s situation is unique and may materially differ from the information provided herein. You should seek the advice of a financial professional, tax consultant and/or legal counsel to address your specific needs before any financial or other commitments regarding the issues related to your situation are made. Popular Bank does not make any representations or warranties as to the content contained herein and disclaims any and all liability resulting from any use of or reliance on such content.