Using Multiple Bank Accounts to Manage Money

Most people think the only way and even the right way to manage money is by opening a checking and/or savings account.  In truth, banks, as well as credit unions offer tremendous possibilities for managing money by using more than one account.  While this might seem that multiple accounts would make money management more complicated, the complete opposite is true.  Of course, the key is to know the types of accounts and the best way to use them, which we cover in this article.

Most people think the only way and even the right way to manage money is by opening a checking and/or savings account.  In truth, banks, as well as credit unions offer tremendous possibilities for managing money by using more than one account.  While this might seem that multiple accounts would make money management more complicated, the complete opposite is true.  Of course, the key is to know the types of accounts and the best way to use them, which we cover in this article.

Remember, the better your money is managed the more potential there is to make money so this is actually a very important topic and one commonly misunderstood or overlooked.  Typically what people do is put all their money in one account and then whether using paper and pen or some type of computer program to include Excel keep track of how much of that money would be used for a variety of purposes.  Obviously, this process would require significant work and attention to detail.

A more efficient solution would be to use multiple accounts to manage money.  If the goal were to make money off the money being saved, then it would be essential to look for high yield savings accounts.  This means the level of interest offered by the bank or credit union on that particular account would be high.  To find a high yield account, you would need to compare what different banks and/or credit unions offer.  The goal in this case would be finding an account with a fixed interest rate, which means even with market fluctuations, the interest paid would not change.

On the other hand, if the goal were to save money, earn interest, and still be able to use the funds when needed, then you want a checking account that also pays high interest but without penalties.  In this case, if the interest were high enough, you would still earn a nice return.  Remember, by using multiple bank accounts to manage your money, risk of your hard-earned money slipping through your fingers would be eliminated.

Without proper money management, most people have no clue how much money is wasted.  Even if unintentional, having no efficient method of tracking money coming in and money going out means that somewhere, money is being spent without actually have a good handle on it.  As a result, money is often wasted that could otherwise be placed in a high yield checking or savings account, or even invested so it makes more money for you.

When choosing more than one bank account to manage your money with the purpose of saving, we also recommend that you avoid the temptation of getting a bank card or debt card that would give you immediate access.  That way, you would not make random or spur of the moment withdrawals but actually have to go to the bank to pull anything out.  During the time of wanting to use the money to make a purchase and arriving at the bank, more than likely you would have realized the purchase was not actually necessary.  However, without restrictions on the account, in case of emergency you would still have access.

Finally, you might look for a bank or credit union that uses an interface making it possible for multiple accounts to be opened under a single account number and PIN.  The obvious benefit here is avoiding the hassle of remembering multiple bank account numbers and personal identification numbers.  Most of these special interface accounts can be opened with little money.  Additionally, these accounts have no minimum requirement, no fees, and most offer competitive interest so you can earn money while having a better way to manage it.