Find out why you NEED more then one checking and savings account. Learn to pay off dfebt faster and maxmize your savings with these essential bank accounts every adult should make sure they have.
Must-have Multiple bank accounts for budgeting
When I turned 18, my parents helped me open a checking account, a savings account, and apply for my first credit card. These basic money management plans were easy to understand and easy to follow.
*You might also be interested in How to Start a Basic Budget For Beginners
But as I got older, my finances began to change. I went from wanting to make money to buy new clothes, to thinking about things like buying a house and saving for retirement.
The next thing you know, I became a mom! And with that, came even more financial obligations. Not only was I saving for my future, but my daughters future as well.
The older you get, the more you need to adjust your financial goals. And the best way to do that is with simple money organization tips and knowing how to delegate your income.
*You might also be interested in Habits of Wealthy and Successful People
The 6 bank Accounts every adult needs to have for financial freedom
1 – Spending Account
By far the most popular bank account that pretty much everyone knows about and everyone has. But do you use it correctly? Your spending account should be a constant rotating balance of money coming in and money going out.
TIP: Don’t worry about interest rates, your money shouldn’t be in here too long to earn any. Instead, look for accounts that have no fees attached.
Your basic checking account should be where any income is direct deposited and all bills are paid from. Every 2 weeks, when my paycheck gets deposited, I sit down and go over what came in and what needs to get paid.
2 – Emergency Fund Savings Account
As Dave Ramsey recommends, everyone should have savings for emergencies. This is only to be used for emergencies. No, a trip to Mexico is not an emergency. Car problems, a new AC unit, medical expenses… those are emergencies you should have money set aside for.
Dave recommends having at least $1000 in your emergency savings account but I think more is necessary. $1000 sounds like a nice chunk of change but
See also: When NOT to follow Dave Ramsey’s Advice
Ideally, you should have 3-6 months worth of income in your emergency savings account. This amount would not only cover most situations but also cover you if you lose your job and have to survive with no income for awhile.
3 – Retirement Account
I remember my mom telling me when I was a teenager “You start saving for retirement as soon as you have your first job. No matter how young you are!”
I wish I would have listened to her advice more closely. I didn’t take my retirement fund seriously until my later 20’s and spent many years trying to catch up to where I should be.
If your company has a 401k, invest in it! Contribute at least as much as your company will match. This is literally free money so don’t pass it up! If they don’t have a 401k, open a Roth IRA account or talk to your financial advisor (most offer free consultations) about what kind of accounts are available to you.
4 – Secondary Savings Account
Your secondary savings account is similar to an emergency fund but this is where you want to save money towards a goal, not an emergency. Think of it as having 2 savings accounts… one for expected items (secondary account) and one for unexpected (emergency).
Expected items you might need to save for are things such as;
- Down payment for a home
- New car
- Upgraded appliances
- Extracurricular kid activities
- and many more!
None of these things are considered emergencies but are goals you still need to save for nonetheless. So once you have your 3-6 month emergency savings set up, leave that account alone and start contributing here.
5 – Vacation fund savings account
This is one account you will not find anywhere in Dave Ramsey’s Total Money makeover. And if you are a super frugal person who has no plans to travel or treat yourself to something nice once in a while, then you may not need this.
But for the rest of us who want to save money but still make memories, you should have a separate savings account for things like vacations, or new clothes. Something you don’t need, but something you save up to treat yourself with.
After all, if you never treat yourself once in a while, you’re bound to fail at your budget at some point. So make it apart of your savings place. Open an account just for ‘fun money’.
6 – College fund
If you have kids, starting a savings account for their college is imperative. College expenses are getting out of hand and the last thing you want them to do is to start their adult life sacked in student loan debt.
You can easily help them out without sinking yourself in more debt. Look into starting a 529 Education plan. You can contribute as little or as much as you want and it’s tax-free when they are ready for school. So even $100 a month started when they are born, adds up to $21,600 by the time they are 18.
Kids don’t appreciate much, but hopefully they would appreciate that!
Other savings accounts you may not have thought of
Ok, I know I said there are 6 bank accounts you should have, but there are potentially more based on your life situation. Here are 3 other bank accounts that may benefit your life…
Separate checking accounts for spouses.
If you are married, it is recommended to have at least one account in your own name, aside from your spouse. I like to think of it as always being prepared, but it can also come in handy if one spouse wants to save for a $2,000 fishing boat while the other wants to spend her extra money on Some nice Michael Kors purses.
It’s a no-brainer that if you own a business, you want to have a sperate account for that as well. Always separate your personal expenses from your business expenses!
But a lot of people might have a business and not even know about it. For instance, this blog is my business and as soon I started it, I opened a bank account just for the blog.
Another example… my mom and sister started knitting items to sell at craft fairs… this is a business as well! No matter how small, if it brings in money or requires you to spend money, it’s a business!
Health Savings Account (HSA)
I probably should tell you that everyone should have a health spending account. But I would be a hypocrite as I do not actually have this myself and don’t think it would benefit me in any way.
My daughter and I (knock on wood) are very healthy and rarely need any medical treatment. So any money set
But if you have medical issues or if your kids just get sick a lot, an HSA might be a good idea for you to have.
Final thoughts on bank accounts your family needs to have
It doesn’t matter the size of your family or your goals. If you want financial freedom then you need to find ways to organize your
Even as a single mom with just one kid, my ‘family’ is small but we have big goals and it almost becomes even more important for me to save for the right scenarios in my life. One bad step and I can find myself in debt that I can never get out of. And no second income to help me.
Whatever your situation, take this list of bank accounts your family needs, and sit down to figure out which ones you may need as well.
What other bank accounts have helped you stay out of debt and reach financial success? I’d love to hear from you in the comments below!
Don’t miss out on these other great tips for financial success!
- Why Credit Scores are So Important
- How to Easily Pay Off Debt Fast!
- 15 Things To Easily Cut From Your Budget to Save Money
- 25 Things Frugal People Don’t Do