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“Saving is a very fine thing. Especially when your parents have done it for you.” – Winston Churchill
A guest post by Trisha Wagner from Depositaccounts
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In the current economy more people are focusing their attention on eliminating debt and building savings. Consumer spending has slowed dramatically as a result of the recession and many people have realized the dangers of living with high levels of debt. For people who have not put a lot of effort into saving money in the past, they may find the concept of multiple savings accounts confusing. In reality having more than one savings account can be a great way to organize savings for specific goals and keep your money organized. This strategy is best used for reaching short term savings goals as you would otherwise see more growth in certificates of deposit or money market accounts. Here are three easy tips to help manage multiple accounts.
• Organization – If you choose to open different savings accounts you will need to remain on top of what is going on with each account in order to reach your goals. There are a few tools that will help you do this if you are not by nature an organized person. Online access is available for most accounts making it easy to monitor and track your savings account activity. If you have the option to set up automatic deposits into your savings accounts this is another way to avoid extra steps and manage your account with little extra effort. If there is a limit to the number of accounts that you may make automated deposits into, choose your “main” savings account to receive the deposit and transfer money to other accounts from that point.
• Specific accounts for specific goals – There is nothing wrong with having one savings account which is used to fund various goals, however it is often hard to keep track of how much money is available for each goal. By designating each account to a specific goal you now have the ability to quickly see how much progress you have made. A few examples of different accounts may include: emergency fund, vacation account, car maintenance account and annual expenses (insurance, taxes, etc).
• Keep your information safe – Even with the advances in technology that make tracking and managing multiple accounts easy and convenient there is still an opportunity for confusion or mistakes to occur. For this reason you should always keep your own records (in a safe place) which include bank and account information as well as passwords used to access your online account. If you receive paper statements or download statements onto your computer you should print and place these documents in a safe as well. Pay attention to automated transactions to ensure the amount of money going in and out of your account is correct and contact your bank immediately if you notice an error.
As more people begin to see the benefits of saving money for both expected and unexpected expenses banks will begin to offer more savings options. This increases the choices for consumers and makes it possible to shop around for the best savings account available. Using multiple accounts can help many people quickly reach their savings goals.
Trisha Wagner is a freelance writer for DepositAccounts.com, where you can compare rates of checking accountsfrom dozens of banks in one place. Trisha writes regularly on the topics of personal finance and savings accounts.
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