I’m thinking about opening a couple of checking accounts to help me stay organized. I deal with anxiety, and having things visually organized really helps. I was thinking of opening separate accounts for gas money and groceries, where whatever isn’t spent just carries over to the next month.
I already have my main checking account where all my checks are deposited, a checking account for my personal spending (wants and extras), and two savings accounts.
Does anyone else do something similar? How many accounts do you have, and what do you use them for?
Opening multiple accounts can increase the risk of overdrafts. I suggest having one main account where your paychecks are deposited and your bills come out, then another account with overdraft protection for variable expenses like gas and groceries. Some people also use budgeting apps or the envelope system to manage expenses, so that might be worth looking into as well.
Personal accounts for ‘allowances’ that come from the joint account (my wife and I each have our own)
Two savings accounts: one for myself (for money I don’t spend from my allowance) and a joint savings/emergency fund
401k accounts for retirement (my wife has her own too)
I believe that if couples set up their finances this way, they’d avoid most money arguments. The only thing you might argue about is how much to set for the allowance, but that can be worked out.
Savings #2 for sinking funds (vacations, gifts, large purchases)
It’s really helpful because I only need to worry about the balance in my spending account. If I’ve spent all my money there, I know I can’t splurge on dinner without cutting into my grocery money. The only thing I’d caution you on is to monitor your bill accounts closely for the first few months to make sure you haven’t forgotten any recurring expenses.
I just use a single checking account and a single savings account, and I track things like gas and groceries in my budget spreadsheet. My concern is that if you have separate accounts for gas and groceries, what happens if you overspend? Do you stop driving or stop eating for the month?
I’ve found it helpful to have multiple accounts. All our income goes into one main account, and we leave enough in there to cover the mortgage and bills. The rest gets divided into accounts for things like food, fuel, and spending. It gives me peace of mind knowing that our essential expenses are covered, and I can safely spend on other things without worrying about being short for bills.
Yan said: @Peyton
Do you have separate debit cards for each account? Or do you move money between accounts when you need it?
We have debit cards for each account. For fuel, we actually use a credit card, but we pay it off in full each month since we know how much we budget for gas. It also helps keep our credit rating up.
You might want to check out r/YNAB. They offer a free month-long trial and tons of helpful videos. It’s a great budgeting tool, and a lot of people in the community say it has been life-changing. They also give students a free year!
I use multiple accounts as well. My paycheck goes into a checking account, and I leave enough in there to cover my auto-withdrawals like insurance and mortgage. The rest goes on my credit card for expenses, and I transfer half of my credit card bill to another account so it’s ready to be paid off when the statement comes due. The leftover goes into my savings for things like annual expenses.