How Opening Multiple Bank Accounts Helped Me Manage My Money Better
I’m good at a lot of things, but managing my money isn’t always one of them. My New Year’s resolution is to become more financially responsible, but the truth is that I’ve been working on it for a while. One of the most helpful strategies I’ve developed is using multiple bank accounts to budget. Here’s why (and how) I do it and why it can work for you too.
Having different bank accounts slows me down and helps me see where my money is going.
Likewise, I use different Google accounts to do different types of work in specialized browsers, I use several different bank accounts to allocate my money, although I use “bank account” to describe some things that technically can’t be done. be bank accounts. Two of them are traditional: one through the bank I grew up with in my hometown, and the other through Chase. The other two are digital and are my Venmo and Chime accounts. For all four, I have an app, a debit card, and most importantly, a plan.
For my regular paychecks, I’ve decided to have my payments split 70/30 between my home bank account and my Chime account, respectively, although portions from both are also automatically allocated to savings. The money I make from teaching spin classes goes to Chase, as does the money I make from personal projects or freelancing. Venmo money is just regular Venmo money received when someone pays me for something or I occasionally, but rarely, transfer some money there. “Serious” expenses like bills, groceries, and student loans come straight from the account I’ve had at home since I got my first job in tenth grade. Most of the time I leave this debit card outside of my wallet so I don’t even touch it unless it’s an emergency. 30% of my regular salary paid into Chime is spent on fun things like personal support and daily Dunkin’ runs . The money received from the spin class in the Chase account is intended for boring needs such as transportation and laundry. Every two weeks or so I evaluate what’s left for less serious cases, if there is anything left, and if I feel like it, I move some to Venmo, which is only for frivolity, like parties. If there’s not enough money in the frivolous account, I don’t go (or at least go with a solid budget). Finally, if there are large expenses that I’d like to pay but don’t want to wipe out an account over it, I switch a little from all accounts to Venmo.
Why this strategy works for me
“But Lindsey,” you might say, “you have the same amount of money whether it’s in four accounts or one. Why bother with all this? Well, because I’m bad at budgeting, that’s why. If I had one account and opened my app on payday to see all my money in one place, I’d go a little crazy remembering to plan ahead for needs of varying levels of severity. Opening four accounts, looking at four different amounts, and getting a better idea of exactly how much I can spend in each category forces me to think a little more and creates a little buffer to keep me from waltzing into Sephora carefree. world.
Some people do this with their savings and checking accounts, which are linked to the same bank account. This is normal… for these people. I tried this once. It didn’t take much effort for the devil on my shoulder to transfer money from savings back to checking with one touch. Moving it between different institutions isn’t difficult in itself , but it does require a little more effort than switching between savings and checking, and that split-second effort is enough to make me stop and rethink my bad idea.
There really weren’t any downsides to this other than the need to have a wallet with more pockets. In any case, all the cards except the “serious” one are linked to my Apple Pay, and the only problem is that I need to be more careful and not allow myself to use them for purposes other than what I assigned them. simply because it is convenient. For a person who is good at budgeting and managing their money, this is probably not entirely necessary, but if you read even a word of this and the one linked to me, think about it. All accounts were easy to open, all debit cards were free with the accounts, and since I implemented this strategy, I have never once found myself in a position where I didn’t have enough money to cover everything I needed , and things I want just because my mind went numb for a moment on payday.