I’m wondering if it’s a good idea to set up a separate account to save money for smaller, short-term purchases. This might just be my autism, but I like keeping things separate. I want to try saving for a few fun things this year, like consoles or games. I already have a long-term savings account and a Roth IRA, and I always try to keep my main bank account around $800 on the low end just in case. But for those smaller items that I want to save up for (think $500 or less), would it be better to just keep track of what I have extra in my main bank account, or should I have a separate account to save in?
Look up sinking funds. I think that’s pretty much what you’re trying to do. I have different savings buckets for buying clothes, getting tattoos, my car insurance deductible, etc. Any expense that I can plan for, I divide by how many paychecks until I need to pay it, and then I save that amount automatically when my direct deposit hits.
@Taliesin
That sounds interesting. I like the idea of having specific buckets for different things. Do you think it helps you stick to your budget better?
I have multiple bank accounts. One for money coming in, one for mortgage and bills, one for daily spending including groceries, one for vacation money, one for my retirement account, and one to save for random things. I’m not charged any bank fees, and the interest rates are all the same, so I’m probably losing pennies a year on interest, but it’s totally worth it to stay organized.
@Dezi
That’s a lot of accounts. I can see how that would help keep everything straight. Do you ever feel overwhelmed managing them all?
I have a high-yield savings account with buckets to separate my money for specific purposes. It makes it easier to see what I can spend on fun things without touching my emergency fund.
Lee said:
I have a high-yield savings account with buckets to separate my money for specific purposes. It makes it easier to see what I can spend on fun things without touching my emergency fund.
That’s smart. I’ve heard high-yield accounts can be beneficial. Do you think it’s worth the effort to set it up that way?
I think having a separate account could really help you keep track of your savings for those smaller items. If you see that money growing, it might motivate you to save even more.
Orion said:
I think having a separate account could really help you keep track of your savings for those smaller items. If you see that money growing, it might motivate you to save even more.
That makes sense. I like the idea of watching it grow. It could help me stay focused on my goals.
You could also consider setting a specific savings goal for each item and track it in an app or spreadsheet. That way, you can see your progress without needing a separate account.
Denny said:
You could also consider setting a specific savings goal for each item and track it in an app or spreadsheet. That way, you can see your progress without needing a separate account.
That’s a neat idea. I might try using an app to track my savings goals. Thanks for the suggestion!