I’m not going to say it’s impossible to manage your money well with just one bank account. But it’s pretty much what I’m saying. There’s no personal finance advice out there that would advise you to have just one bank account. Separating your money into different bank accounts makes it much easier to bring your budget to life.

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How Many Bank Accounts Do YOU need?

The first step to figuring out what your goals are. You build your money management plan around that.

At a minimum, you should have a checking account (where your income enters and where bills are primarily paid from) and a savings account for every finite goal you have. This means you should have at least two bank accounts. Now, do you want to save up for trips? Are you working on building an emergency fund? Are you planning on buying a car or remodeling your home? Theoretically, each of those line items should have its own account.

READ MORE: 3 Steps to Deciding How Much of Your Paycheck to Save

READ MORE: How to recession-proof your life in 6 steps

My bank account breakdown

Honestly, the number of accounts I have is sort of absurd. I think about consolidating at times but it works so I leave it alone. All these bank accounts are free and I don’t pay ATM fees ever.

Checking Accounts

I technically have three checking accounts but hear me out. One is a joint account I have with my sister. It’s really her account though. I have another joint account with my husband through which we pay household bills if needed. It’s primarily his account though. My primary checking account is where the majority of my income direct deposits. I pay all my credit cards, transfer money to my savings buckets, and transfer money to invest. So to be real, I have one checking account. I just have my name everywhere.

Savings Accounts

1. I only net like $35/month from a home care nursing job since I only see one patient a month. So I put half that in an Ally savings account that I barely look at so that money is there when I want to make a fun purchase. This account makes .80% interest.
2. The other half of that goes into what we call our Future account. It is a joint savings account between my husband and I. It is also a line item in my budget so I add to it every two weeks when I get paid. We keep a max of $1000 in there and use it to pay for car repairs, our auto insurance for the year, relatively small unplanned purchases, etc. This account makes 0.50% interest. Whenever that account surpasses $1000, I take 75% to our alternate Future account and 25% to our joint investment account.
3. This alternate joint Future account is in a high-yield savings account with Marcus. Of course, with interest rates so low, it’s kind of laughable to refer to it as high-yield but it’s better than your brick-and-mortar rates (average is 0.05%). This money has no ATM card access so MUCH less risk of touching it. So it is our emergency fund account. This account makes .60% interest.
4. We also have a joint Condo account. This account pays the mortgage, utilities, HOA fees, home maintenance, etc. This account makes 0.50% interest.
5. We have a joint Vacay account. I put $100 every paycheck in there. It’s money I use to book vacations and the money we use for expenses when traveling. This account makes 0.50% interest.
6. We have a joint savings account with the credit union we used to finance our car so that we could use them to finance our car. I don’t contribute to it personally but every month $500 gets transferred from the condo account making it sort of a supra-condo account. It doesn’t have ATM card access. This account makes 2.55% interest.
7. Finally, I have a savings account with Goldman Sachs that I don’t contribute to. It’s there to transfer funds if we’re traveling overseas so we can avoid international ATM fees.

Those are all my accounts, I think. This brings us to an official total of 10 but really 8 bank accounts.

When choosing bank accounts, consider this

First, you want an account that is FREE. No reason to be charged by your bank for the pleasure of doing ordinary business with them.

Secondly, you need to determine how accessible you need the money to be. If you want or need your money to be readily accessible, look for an account with ATM card access but no FEES. For accounts where you want the money out of your sight, use a bank that is outside of your regular bank account so you’re not seeing it every time you log in.

Third, consider your preferences. I, personally, do not like banks that do not have a robust and accessible website set up. It doesn’t have to be super fancy but I don’t want it to look like it’s been the same website they’ve had since .com came to be. So despite the fact that the credit union is providing the most interest right now, I still don’t want my money there. It just annoys me. So when choosing a bank account, ask yourself, what do you value in your banking experience? There’s tons of variety and options out there. As long as your bank is FDIC insured, you shouldn’t worry so much about the bank being one you’ve never heard of or not having a brick-and-mortar location.

Finally, figure out your savings style. There are a lot of different options here too. You can, of course, have your job direct deposit your entire check in your main checking account and you transfer the money to these differing accounts. That’s what I prefer to do. Others deposit their entire check in their savings account and just take out how much they need for bills. If you get paid via paper check, then having all the money deposited in one account is how you have to start.

Another option: you can have your job direct deposit certain amounts or percentages of your check to differing accounts. This way you never see the money you’re not supposed to spend in your checking account.

Or you could schedule transfers from your primary checking account to your savings accounts.

Some banks even allow you to have one savings accounts with “envelopes” within them to separate your money for different goals.

To-Do List

• Count up how many bank accounts you have as well as the goals you want to save for. Are they in line?
• If you don’t have one yet, open a high-yield saving account, if not for each goal, then at least for your emergency fund. Nerdwallet is a great site to help you choose your next account.
• Determine how much you can save and start today.
• As much as you can, automate your savings! You’ll be surprised how quickly it will add up when you’re not thinking about it.

Your turn? How do you save for different goals? How many different accounts or buckets do you have? Share in the comments.

Originally published in September 2020, this post has been updated by Prisca Benson.

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