Everyone knows that savings accounts are great ways for people to store extra money and save for goals. But did you know there are many reasons to have multiple savings accounts?
Having multiple accounts avoids having that large, lump-sum balance in checking, which can be extremely tempting. If you fund your “side” savings accounts, you’ll be left with a smaller lump sum — and less temptation to buy something completely unnecessary.
The most important side savings account is the emergency fund. Your emergency fund should be at a different bank if that is possible. (Recall that the FDIC insures deposits up to $250,000 per person, per bank.) The emergency fund should be your “untouchable” account. Don’t even activate the debit card! Leave it at home so you can’t access it when you’re out and about. Better yet, you can leave the debit card with Judith Heft & Associates for secure storage!
As far as funding a new side bank account, some ways are easier than others. The first is to update your direct deposit information and split your deposit between your main account and your side account. You can also set up automatic transfers between accounts. If push comes to shove, you can always do the transfer manually.
Anytime you add additional accounts to your financial life, your finances get a bit more confusing. That’s where Judith Heft & Associates comes in. Our services include bank account reconciliation to help you keep track of all your accounts so that you:
- know your spend.
- know what you can save.
- can set realistic, but attainable, goals.
To learn more about how Judith Heft & Associates can help you achieve your Post-Worry Lifestyle, contact us.