Saving money is something I have thought a lot about, especially over the course of the last five years. I am a saver by nature. However, I have gone through periods of more frivolous spending (cough… cough… the pandemic ;-)) I have noticed that my emotions have a direct correlation between how I am feeling and how much I am spending. During the peak of the pandemic when there were so many unknowns, I was spending a lot more than I probably should have been. And to be honest, the balance in my bank accounts became low enough to really start stressing me out.
When I made the brunt my money mistakes, I was thankfully only in high school and had the resources be able to really learn from those mistakes. The mistakes I made during this time really taught me the importance of not only saving but also the importance of preparation and preparing for a disaster, should it ever happen. Honestly it wasn’t until working over the summer that I began to regain control of my finances. Once again, I began saving more than I was spending and this felt great!
My Challenges with Only Two Bank Accounts
I noticed it was a challenge to save money with only two bank accounts. I used to have a regular checking and savings accounts. However, I began really struggling with saving money. Money would come in but then it would stay in my checking account and I would eventually spend it. I rarely moved money to my savings account and therefore I wasn’t saving much.
Several months ago I created a third bank account by setting up another regular savings account. However, the purpose of this bank account is an emergency fund. In other words, I put money in this account, but it NEVER leaves, unless of an actually emergency. And, hopefully I will never need to pull money from this account.
I try not to pull money from my regular savings account just as a regular practice. But if I needed to make a purchase and I didn’t have enough money in my checking account, then I would transfer a bit of money over. However, I try to avoid running into situations like this as I don’t want to make this a regular practice. The only real way to save money is to set money aside and not touch it!
Fast forward to mid-August I created a fourth bank account. This one is a checking account. I created this account with the purpose of being able to start this blog. In reality, I use it as a bit of a business account rather than a personal checking account. I never spend the money in it unless it is for something blog related. I wanted to keep this separate from my regular checking account, so I set up a new one. This account is helping me to reach more of my finance goals.
The Four Big Bank Accounts
Main Checking Account
This is your main bank account. This is where you pay all your bills, pay for groceries, and the account where all your spending happens and takes place. All of my paychecks are deposited into this account. However, shortly after the deposit, I then transfer some of my paycheck into both of my savings accounts. That way I don’t have the chance to spend that money.
Note, if your job offers the chance to split the paycheck into multiple accounts, then do it!! This way that money won’t even touch your checking account and you won’t have the chance to spend it!
Primary Savings Account
You should have a primary savings account where you are saving and putting aside money each month. You shouldn’t make it a practice to withdraw or transfer money from this account, unless you are in desperate need. As a standard practice, I transfer 10% from each paycheck into this account.
Like I said above, if you can have your job split the direct deposit into multiple accounts, then I strongly recommend going that route!
Secondary Savings Account
I feel that every person should have a second savings account that is dedicated to emergencies only. Even though it’s not fun to think about possible disasters down the road, it’s always better to be prepared. Each month I transfer 20% of my paycheck into this account. This account has grown substantially since the start of summer just from depositing money from each of my paychecks.
This account has grown over 300% from May 2022 to September 2022! Yes, I actually did the math, and yes you read that number right!! I only set aside 20% from any income that came into my account!
Secondary Checking Accounts
This is the last bank account that I recommend everyone have. However, it could be used in a variety of ways. I am using it for my blog. Any of my blog expenses go through this account. However, you could also use it as a ‘fun’ account. If you have any unspent money left over at the end of a month put it in this account to save up for something fun or exciting. Eventually, I plan to create a third checking account just for this reason.
This secondary checking account is a great way to save up for goals or fun family activities, such as going on a vacation or an anniversary.
Endnote: The Importance of Multiple Bank Accounts
As you age, accounts will evolve and the purpose of an account may change. Or, you may need to create other accounts. There are so many more accounts that you could create. If you want more ideas I recommend you check out Jordan Page from FunCheapOrFree. She has a blog post all about the seven bank accounts that she suggests every family has. This was my inspiration for creating my emergency and blog bank accounts.
Ever since creating these four accounts, I have done a much better job at saving and keeping track of my money. I have also found that it helps to save if you have something to look forward too, such as a big trip. Try finding something to save for and see if that helps you! Do you have more than the two basic bank accounts? Are you like me and motivated to save money? Let me know in the comments or send me a message!