Usually, we can manage to spend a little less than we earn, and it’s always a good idea to save a little something on the side, for rainy days. Since saving up your money under the mattress is the really old (and hilariously stereotypical way), you can use banks and everything is pretty much made easy for you. You can even make money off your money while they are just sitting there. However, we don’t really save only for rainy days, do we? We want vacations, we want computers, college for the kids, health care, unforeseen expenses and of course, we have to have something saved while we are out of a job. All of this can be a bit hard to do if you only have one savings account, which is why it’s a good idea to have several.
Multiple savings accounts for multiple goals
I basically know what I’m saving for which is why I have several savings accounts for several different goals which makes it really easy to keep track of everything, I’m collecting good interest, too, so while my money is sitting in the bank, it’s actually working for me. This enables me to make money out of nothing and still save for the said goals. I know that when the new generation of computers is out I will want to buy one, which is why I’m saving for one (rather, I have actually saved, but I’m still waiting for technologies to advance more so the upgrade is worth it, while I’m making money from my money). I’m also saving for other stuff but sadly, I won’t be anywhere near the goal anytime soon, but still, this is really beneficial for me because I like to feel in control and I know exactly how much I’m depositing and how much I have left until reaching my goals.
Some banks offer you the option to open a savings account and get money deposited from your checking account every month automatically. You can easily do this and make sure that your saving is done automatically, but I don’t like this option because, like I said, I like to feel in control. Still, it’s not an awfully bad idea if you’re lazy or like other people doing your work for you. It makes things really simple which is the other problem I have with it – if I don’t deposit my money, myself, I don’t feel like I’ve saved it. It will be like it’s just there, waiting for me to go and spend and it would change my whole mentality about the situation, and as far as saving is concerned, mentality means as much as money (if not even more).
There are several downsides you might not really have a problem with if you’re saving properly and/or enough. One downside is that these savings accounts usually have a minimum balance you have to meet, which you might not find a downside, in general, but if you don’t have enough money, you won’t be able to separate it into several accounts. Another disadvantage is that if you don’t find the correct rates, your money might not work for you as much as you would like, because smaller sums of money, combined with small interest rates generate negligible profit for you. You really have to manage these things, but the maybe the worst part is that you might feel tempted to withdraw because you’re not going to lose your interest for all your savings (just the one you’ve withdrawn from). If you can manage all of that and can make good financial decisions, then opening multiple savings accounts might be perfect for you.
Author Bio: Morgan is finance manager at http://www.bestcleanerslondon.co.uk/carpet-cleaning-n17-tottenham/ and he has a lot experience to share with his readers.