How Many Bank Accounts Should I Have?
In case you’ve ever asked yourself”How many bank accounts should I have? ” Or find it tough to handle your money in general, you’re not alone.
According to some 2017 Public Survey, nearly 8 in 10 Americans currently live paycheck to paycheck. Fortunately, there are lots of things you can do to improve your situation and relieve this financial stress.
How Many Bank Accounts Should I Have?
One of the easiest ways to ease financial stress is to start multiple bank accounts and use them accordingly. It’s perfectly okay to have several bank accounts for budgeting. But how many bank accounts are adequate, and how many is too many?
The answer to the number of bank accounts you should have depends on your personal situation. Most people are fine with just a few merchant bank accounts initially. Let’s talk about what those balances are and how to use them.
Most everybody knows they need at least a checking account to maintain their money for daily usage. Single people and married couples that handle their finances jointly may only require one checking account.
Can I have two Bank Accounts?
Some married couples, however, find that dividing up their financing into three different checking account — mine, yours, and ours — works best for them. If one partner is a spender and the other is a saver, this might be a fantastic solution.
Naturally, it then requires both partners to handle their checking account independently. One or both partners will also have to handle the joint checking account to pay for shared bills like utilities, rent/mortgage, etc.. This accounts arrangement adds new complexity to the circumstance, but for many people, the advantages outweigh the downsides.
Open A Saving Account:
Savings accounts generally offer you a whole lot of useful advantages that are custom-designed to your job. By means of example, savings accounts offer higher rates of interest and have limitations on how many times it’s possible to draw money. Maintaining your savings separate from the spending money (i.e. your checking account) also ensures that you don’t accidentally spend your money on impulse purchases.
The majority of us have at least one savings account too. But if you’re living paycheck to paycheck, go into debt frequently, or would just like to plan things better, you might find that opening many savings account for a variety of functions works best for you. This is known as the” bucket” savings plan. Most banks and credit unions will permit you to open multiple savings account to achieve this.
Open An Emergency Fund Account:
A lot of people find it useful to maintain a separate savings account specifically for an emergency fund. This money is for events like unexpected car repairs, job loss, or emergency hospital visits. It’s like a fire extinguisher in a glass case: you just break the glass (i.e. draw the money ) in a real emergency.
If your emergency fund is mingled in with your savings to various accounts, you risk accidentally withdrawing the money. As a result of this, you may wind up in a sticky situation when a true emergency arises.
Short-Term Savings Accounts:
Lots of people also find it beneficial to prepare separate savings into account for short-term savings goals like a holiday, holiday shopping, or healthcare expenses. Some people refer to those mini-savings accounts as” sinking funds.”
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Again, separating these markets guarantees you do not accidentally use them for the wrong purpose. It would be a shame to save money for a superb vacation simply to find you spent the money on something else and no longer had the money to purchase your tickets.
Accounts for Investing:
It’s also suggested to have investment accounts for your future, such as for retirement or a house down payment. Unlike an emergency fund, these are planned expenses that can come to pass. However, they’re still years in the future.
These investment accounts generally allow your money to grow to a much greater value with time. On the other hand, they aren’t insured, and there’s also the risk you’ll eliminate a lot of money.
That is why plenty of people prefer to maintain their investments in a bank account where it earns a smaller (but guaranteed) rate and is guaranteed. There’s no wrong or right answer, and we ask you to talk to a financial adviser about those huge life decisions.