The Secret to Spending Less and Saving More: Multiple Savings Accounts
We’ve all heard it before: “Save more, spend less.” It sounds simple, right? But when life keeps throwing expenses your way, sticking to a savings plan can feel like trying to hold water in your hands. Here’s a Wellth hack that’ll change the game: setting up multiple savings accounts to help you take control of your money, one goal at a time.
Having different accounts for different savings goals isn’t about complicating your finances; it’s about making your money work for you. Here’s how it works and why it can help you stay on track with your spending and savings.
Why Multiple Savings Accounts?
Think of your savings as a series of buckets, each one dedicated to a different priority. This way, you don’t accidentally dip into your emergency fund for a weekend getaway or spend your holiday gift money on last-minute bills. With separate savings accounts, you’ll always know where your money is going and what it’s for.
The Key Accounts You Need
Here are a few essential accounts to help you cover everything from today’s unexpected expenses to tomorrow’s big dreams:
Emergency Fund
Your safety net for life’s surprises—medical expenses, car repairs, or that month when everything seems to go wrong. Aim for three to six months' worth of living expenses.
Keep this account separate from your everyday banking to avoid temptations.
Short-Term Goals
This could be anything from a vacation fund to saving up for a new phone. It’s for goals you plan to achieve within the next year or so.
Label this account clearly to remind yourself that it’s for something special and not everyday expenses.
Long-Term Goals
Think about the bigger things: a down payment on a house, your child’s education, or starting your own business. These are goals that take time and patience, but the payoff will be worth it.
Consider using a high-yield savings account to maximize your interest earnings.
Bills and Subscriptions
Have an account dedicated to covering regular expenses like rent, utilities, and subscriptions. This keeps you from overspending on non-essentials and ensures your bills are always covered.
Splurge Fund
Yep, you read that right! This is your guilt-free money for the things you love—whether it’s treating yourself to a spa day, buying new clothes, or indulging in a fancy dinner.
Having a designated “fun” fund means you can enjoy life’s little luxuries without derailing your budget.
How to Set Up and Use Your Savings Accounts
Now that you’ve got the accounts in mind, here’s how to get started:
Choose a Bank That Makes It Easy
Look for a bank or credit union that allows you to set up multiple savings accounts without extra fees. Many online banks make this simple and even let you nickname each account.
Automate Your Savings
Set up automatic transfers from your checking account to each savings account right after payday. This way, you’re prioritizing savings before spending, and you won’t even miss the money.
Adjust Contributions Based on Your Goals
If you’re saving for a vacation next summer, you might put more into your short-term goals account for a while. If you’re focused on paying down debt, you might ease up on splurge contributions.
Track Your Progress and Celebrate Wins
Watch your balances grow and celebrate your progress! Even if you’re only putting in a small amount each month, it adds up. Reward yourself when you hit a goal, like fully funding your emergency account.
Hacks to Spending Less and Saving More
Pay Yourself First: Treat your savings like a non-negotiable bill. By automating deposits into your savings accounts, you won’t have to rely on willpower alone.
Round Up Purchases: Some banks offer programs that round up every purchase to the nearest dollar and put the difference in your savings account. It’s a small way to make a big impact.
Cash-Only Week: Limit your spending to cash for one week to see how it affects your habits. You might find you’re more mindful about where your money goes.
Say “No” Without Guilt: It’s okay to skip happy hour or the latest sale. Your future self will thank you for prioritizing what really matters.
What Really Matters Is You
Setting up multiple savings accounts isn’t about limiting your life. It’s about creating a life that’s full of freedom, choice, and joy—on your terms. When you’re in control of your money, you’re not just saving for a rainy day; you’re saving for sunny days, too.
