JW’s Financial Coaching Podcast Lesson #123-Is there a need for multiple bank accounts for saving?

  • How to track your savings fund
  • Things to consider when deciding whether to lump your savings together or keep it separate
  • The only way to guarantee savings
  • How Lisa and I track our savings
  • Quote of the lesson


Today we are talking about a nice problem to have, how to track all of your savings accounts. If you aren’t there yet, don’t worry, you’ll get there as soon as you develop a plan, stick to it, and start to pay off your debt.

But how do you keep track of all the different saving funds? Once you become debt free and are able to bank more money each month you’ll be able to save money for variety of funds, including:

  • Emergency Fund
  • Vacation Fund
  • Car replacement Fund
  • Down Payment Fund

We’ll try to answer the question today if it is better to keep all your savings fund separate or lump them all together and keep a balance each month. Like much with personal finance, there is no one right way to do things.

But it is important to track it somehow, because the tendency is to just let it pile up in our checking account. Which makes it a lot easier to spend it and let it slip away like sand in our hands.

There are a few things to consider however before you decide whether or not to separate your savings account.

What is your financial temperament?

Are you a saver? A spender? Do you like your finances to be detailed or are you more of a free spirit? Answering these question will you determine whether you want your funds separated so they aren’t as easily accessible or if you want to spend the time breaking the dollars out.

How much money are we talking about?

If you are tracking a few hundred bucks here and there it might not be worth it. But if you have a significant balance over a longer period of time, it might be better to separate it out, so you know exactly what the money is for.

How detailed do you want your savings?

Are you someone who has multiple savings projects occurring at the same time? Or do you like to be spontaneous and decide to do one thing like a vacation, car, or home remodel once a year? If you know you just want to do something, but not exactly what, just having one savings account would probably work best.

What Lisa and I do

Lisa and I do a hybrid when it comes to our accounts. We have three accounts. One is our main account, one is where we write our checks out of each month, and the other is where we put excess savings into. At the end of each month I take the balances in these accounts, add them up, then break them out the following ways

  • Emergency Fund-Pretty constant, rarely changes
  • Stock Purchase Plan-Money we are saving to cover contributions to our employee stock purchase program
  • Insurance/Utilities sinking fund-The money not paid on a month basis that we still budget for
  • Car Repair Fund
  • Children’s college fund-Any money we get as a gift that we will put in our children’s education account by dollar cost averaging
  • Cash that we get for gifts
  • Fixing the house fund
  • Car Replacement/Vacation Fund-We don’t separate these funds out

This way works for us since we are both natural savers and aren’t likely to spend the extra money in our checking out. It’s less maintenance for us then having a separate account to track everything. But we have looked into ways into improving our savings.

Today’s quote of the lesson is brought to you by the JW’s Financial Coaching Newsletter

“To be rich, is not what you have in your bank account, but what you have in your heart.” ~ Unknown

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