Avoid getting into a financial bind.
A lot of people keep their savings in just one bank account. While it does help keep your finances in order, opening multiple bank accounts allows you a little more flexibility.
Here are five reasons to spread your savings across several accounts.
Multiple bank accounts for multiple financial goals
People are sure to have more than one financial goal at a time. You’re saving up for a vacation or a new laptop. Perhaps you’re thinking of something more long-term, such as a house or retirement. If this is the case, it only makes sense to have multiple bank accounts for each of your targets.
If you’re planning on getting multiple bank accounts, it’s good to have at least three. One is for your emergency funds in case of illness, job loss, and the like. The second is your needs account for expenses like rent and bills. The third is your wants account for things like vacations, gadgets, clothes, and more.
More motivation to save
Being specific about what you’re saving up for allows you to focus better. When it’s clear to you how close you are to reaching your financial goals, you’ll feel more motivated to reach them. You can assess each account and adjust your saving habits accordingly.
Multiple bank accounts are a way around downtime
Banks often have maintenance periods when you can’t access your account. ATMs can go offline when you least expect it. By having multiple bank accounts, you can avoid finding yourself in a pinch when you need money the most.
Protect yourself from scams
Having multiple bank accounts adds another layer of safety for your money. With banking scams becoming more prolific, you need to be smarter about securing your savings. But in case you fall victim to hacking, thieves won’t have access to all of your money.
A sale at the mall or a shopping app is not an emergency. But it can be tempting to dip into your emergency funds to get a new pair of shoes. By having multiple accounts, you can keep track of your spending better.
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By organizing your savings into different financial goals, you’ll find it easier to save money. Good luck!
Featured Image Paulo Correa