Multiple Bank Accounts. Bear and Bull Market Trends Investors Should Know About

While many people only have one checking account and one savings account, I’ve had multiple bank accounts for as long as I can remember.

In addition to setting financial goals and having a budget, having multiple bank accounts is how I’ve been able to manage my money, pay off student loan debt, buy a house and travel the world.  

The easiest way that I’ve found to manage my money is to have multiple bank accounts.

In fact, you might be surprised to find out that I currently have 11 bank accounts (and have plans to open more in the future).

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Why 11 bank accounts?

So you might be wondering, why have 11 different bank accounts?

All 11 bank accounts are essential to executing my budget, and honestly with so much going on financially, it’s how I stay organized.

Here’s a breakdown of all of my bank accounts:

  • Checking Account (for daily use)
  • Emergency Fund (check out the Best Savings Accounts of 2019)
  • Business Checking Account (for daily use)
  • Business Checking Account (for taxes)
  • Car Insurance
  • House Repairs
  • Mortgage Fund
  • Travel Fund
  • Fun Money
  • Debt Pay Off
  • Groceries

Other bank accounts I’ve since closed or renamed:  

  • Roommate Deposit (for when I had roommates)
  • House Downpayment

What are the benefits to having multiple bank accounts?

Having multiple bank accounts allows me to manage my money more effectively because I can better track my spending and progress.

Personally, I don’t like to commingle funds because I tend to overspend.

To avoid this I keep it simple by separating out as many important budget categories as possible. And when I say seperate, I mean that each budget category gets its own bank account.

Seriously, I can’t imagine my mortgage payment being in the same account as my travel fund. I’m not sure if my mortgage would ever get paid!

Related: [Podcast Episode] Why You Need a Travel Fund

Nevertheless, by having multiple bank accounts, each checking account, savings account or money market has a specific purpose and manages a particular budget category.

Think of it this way, have you heard of the envelope system? Having multiple bank accounts is like having a virtual cash envelope system.

Similar to the cash envelope system where each budget category gets its own envelope of cash, I think of each bank account as a virtual envelope. But because it’s virtual, I don’t have to worry about losing money (besides fraud) or making sure that my money is in a safe place. And since I’m always trying to maximize my travel rewards by earning points and miles, I rarely carry cash anyway. More free travel, yes please!

Here are some other perks to having multiple bank accounts:

  • Avoids financial distractions
  • Keeps track of spending
  • Sets money aside effortlessly
  • Simultaneously work on multiple savings goals
  • Easily pay bills and pay off debt every month
  • Take advantage of bank perks like higher interest rates and bonuses

Is having so many accounts hard to manage?

Not at all.

Everytime I get paid, funds get deposited into designated bank accounts and once funds run out that’s it. I don’t dip into other bank accounts (or budget categories) to compensate.

For example, when my insurance bill is due, I know exactly where to go to find the funds.

Helpful Tip: You can even take it a step further and set up autopay directly from a particular bank account so you don’t have to get involved. When a bill is due, the funds will automatically be withdrawn without you having to make a payment.

Automation is a powerful tool.

Who is this strategy ideal for?

Having multiple bank accounts can work for anyone but this strategy is especially helpful if you have large annual expenses like a vacation you’re saving up for, have multiple savings goals, own a business or have infrequent bills that you often forget about like annual insurance premiums.

Overall having multiple bank accounts works for me. It’s simple, helps me build productive financial habits and despite the large volume of bank accounts, it’s easy to manage.

Did you enjoy this article, check out the rest of the Back to Budgeting Basics Series and sign up for my signature course!

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