If you want to improve your finances and get started with budgeting for beginners, let me tell you the secret sauce that has been working wonderfully for me when it comes to saving money and budgeting!

It’s budgeting with multiple bank accounts!

This might seem a bit overwhelming to manage, but once you have everything set up and a game plan in place for what needs to go where it’s actually super simple! I find this to be the easier route because everything you’re budgeting or saving for is in its own place.

Here is exactly how (and why) you can successfully budget with multiple bank accounts!

How to Successfully Budget With Multiple Bank Accounts

Why should you budget with multiple bank accounts?

First, let’s start off with the “why”. Why is it a good idea to budget with multiple bank accounts?

As I mentioned, this is a good idea because you can have one bank account for one thing, instead of all your money being dumped into the same account.

Let’s break it down.

Budgeting with multiple bank accounts keeps your money organized

You likely have more than one money goal you are working towards at a time, right? Maybe you have debt you want to pay off, an emergency fund to save for, a rainy day fund, or even something fun like a vacation.

But, if you have one single savings account for all of those things, how will you know which goal you are saving for?!

Having multiple bank accounts separates everything so you can save for everything all at once and still keep track of what you have saved way better.

For example, let’s say you want to save money in an emergency fund. You can open up one account for that and put in $1,000. Then let’s say you also want to save for a vacation, you can also open an account for that and start with $100.

This way, when an emergency pops up, you know which account you need to pull from and where the money is coming from. You won’t need to worry if $100 of those dollars was specifically for a vacation or if you’re pulling from your emergency fund accidentally!

| Ready to get started on your budgeting journey? Check out my Budgeting template!

You can make more interest from your money

If you plan to have a rainy day fund, this is typically for smaller expenses and should be easier to access in case of emergencies. So, I personally keep my rainy day fund money in a savings account attached to my bank.

This makes transferring money in and out literally instant when I need it. No waiting is required.

However, banks notoriously have terrible interest rates. Which means, I get mere pennies back for having my money saved there!

So, I have my bigger amount saved for my emergency fund in a high-yield savings account where I make more for my money! But the downside to this is, I can’t get the money instantly when I need it. It typically takes a few days to get the money, more if it’s a weekend or bank holiday.

That is why I have two savings accounts, one for quick cash and the other for high return!

How to start budgeting with multiple bank accounts

Decide what goals you are saving for

When budgeting with multiple bank accounts, the first thing to figure out is what exactly are you budgeting for? What are your savings goals?

I personally have an emergency fund savings goal, a rainy day fund goal, a retirement savings goal, and one for paying taxes since I’m a content creator who doesn’t get taxes taken out of what I make!

This is going to look different for you depending on your goals, and they can change over time. For example, my current emergency fund used to be a house-saving fund.

Now that I have a house, I no longer need it for that!

My current rainy day fund used to be my “wedding account.” But after getting married, I didn’t need to save for it anymore! (It still often gets called the “wedding account” though! Old habits are hard to break!)

So maybe you’re saving for buying a house, a new car, maybe a baby. Maybe you’re saving for house repairs, or just an emergency safety net.

It could be for fun things. A concert or “going out” fund, a vacation… whatever your goals are! Set your goals and also set an amount for what you’d like to have saved in each.

Open up your primary bank accounts

You likely already have a checking and a savings account with a bank, so that is a good start!

(And if you don’t have a checking or savings account- this is your first step!)

Determine what your current savings account will be used for, and see if your bank allows you to open multiple accounts! Many of them do.

I currently have my primary checking account, where all of my bills come out of, a rainy day fund savings account, and another checking account for my business. This is where all of my income comes in and any expenses for my business.

If you’re not a content creator like me, you’ll more than likely have your primary checking account also hold all the income you make as well.

  • Understand the bank’s fees & policies

It’s important that you understand all the fees and minimum balances that come with your bank. If your current one has a lot of fees or a very high minimum balance, you may want to consider switching!

And if you don’t have a bank account at all, make sure you shop around and understand what each bank wants from you so that you can find the account to best suit your needs and savings goals.

My current bank has a $1 minimum open start for new accounts, and for how much you need to have in your account. With no minimum balance fees, it’s a great option!

My last bank needed a minimum of $1,000 in the account, or a direct deposit set up over a certain amount. As a content creator who doesn’t have direct deposit, this was super stressful to maintain! So I switched banks.

Also make sure you know the overdraft policy, just in case. Ideally, you’ll never get the the point of overdrafting, but things happen sometimes!

Some banks will give you a 24-hour grace period, others (like mine) say it doesn’t matter if you overdraft and notice right away, they’ll still charge you an overdraft fee even if you correct it quickly. Not the greatest option, but it is what it is.

However, my bank does allow you to set up a safety net where an overdraft will pull the money you need out of a savings account for less of a fee. It sucks that you still get charged, but the $4 or so fee is better than the much larger overdraft one!

The other option is to not allow the purchase to go through and be declined at checkout. You’ll get to choose whatever option you like best (depending on what the bank has) when you open up your account.

All of this should be explained during the opening process, so don’t worry! And don’t be afraid to ask any questions you have, it’s their job to help you and you want to make sure you understand what you’re getting into!

Open your secondary accounts

Next, look at your savings goals and determine what kinds of accounts you’ll need and how many. Here are some examples;

Must have accounts:

  • Primary Checking
  • Primary Savings
  • High-yield savings account
  • Retirement account (Roth IRA, 401k, or other options)

Optional accounts:

  • House buying fund
  • House repair
  • Car fun
  • Kid fund
  • “Fun” fund (Concerts, shows, eating out etc…)

So we’ve already established that the primary checking is for income and bills to come out of, and the primary savings account I personally have set up for a rainy day fund. You can, of course, use it however you see fit, but let’s talk more about the rest.

High-yield savings account

This is my emergency savings account which, like I mentioned, has most of my money saved into it. With the amount of money that is currently in there, I get about $60 in interest every single month! Which is why I consider this type of account to be a must.

My money is just sitting in there, growing each month and getting $60 added on top of it! You will not be getting this return on investment in a regular old savings account!

If you’re not sure where to start, I have two high-yield savings accounts with two of my credit card companies. Yeah, did you know credit card companies have bank accounts as well?!

So if you have any credit cards, I recommend looking there first and comparing rates! I have one open for an emergency fund and one where I am saving for taxes.

Normally, a tax saving account isn’t necessary for most people. But I am a content creator and what I make comes directly to me- meaning nothing gets taken out for taxes and I have to do that on my own. So, into a HYSA (High-yield savings account) it goes!

Retirement account

Saving for retirement is super important, no matter what age you are.

I started investing in my retirement account at about 24 years old, and even though I haven’t been able to save as much as I’d like into it, the account has still grown!

If you are working full-time at a 9-5, your employer likely has a 401k or similar for you available. It’s a smart idea to start investing part of your paycheck into that, especially if your employer has employee matches.

Basically, an employer match is when your employer says “I will match 3% of whatever you put into the account” usually up to a certain dollar amount.

You’ll want to max this out as much as possible. Even if you can’t fully take advantage of that employer match, take advantage of as much as you can! This is basically free money!

Since I am my own boss, I don’t have the option to do this just yet. So, I opened up a Roth IRA retirement account for myself and one for my husband who isn’t full-time at his job and therefore has no 401k option yet.

There are quite a few options when it comes to opening up your own retirement account, but Roth IRA sounded the most appealing to me because I am paying taxes each year on the money I put into the account.

Which, at first glance, kinda sounds like it sucks. Paying taxes each year? Why would you want to do that?!

And that is because, with other accounts, like a traditional IRA, you’ll get taxed anyway. But the tax will happen at 65 or whenever you start taking distributions (A.K.A pulling money out of) the account during retirement.

So, in order to not have to deal with that, I take the hit each year and pay it forward now! It’s like a little gift to myself at 65. Besides, who knows what taxes will be like in 40+ years!

TIP: I am definitely no financial expert, especially not when it comes to retirement funds so if you’re interested in learning more about this (from experts who know way more than me!) I recommend checking out this podcast called Financal Feminist! She talks about a lot of these topics and more!

  • Optional accounts

You can have as many accounts as you want, whatever is going to make the most sense for you, your family, and your savings goals!

When you do open these additional accounts, make sure you add a name to them so you know what they are for. This will help you keep track of them and stay motivated towards your goal!

If your bank account has a name like “Checking- 72-9736-1739” That can get confusing to keep track of each.

And if you have a purchase you want to make, say a brand new TV, but you only have $112 in the “fun” account, then you can’t make that purchase. And you can’t pull from your $1,100 “house saving” fund because that money already has an intended purchase!

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How to Successfully Budget With Multiple Bank Accounts

Fund those multiple bank accounts!

Once you have everything set up and your accounts are ready to be used- now it’s time to fund them! This can be done any way you see fit.

Maybe you have a good chunk of change in your savings account, and you decide to spread it out across all your bank accounts to get started. It doesn’t have to be a huge amount, and it also doesn’t have to be equal!

You could keep $2,000 in your savings and maybe put $500 towards starting your house saving fund, $100 towards vacation, and $50 towards fun. It really doesn’t matter, as long as it makes sense for you!

Prioritize your goals on which is most important and fund those the most. Especially if the goal you have, like saving for a house, is higher than something like saving for fun.

One thing that I think should be higher up on the list is saving for retirement! Who knows what funding will look like for us in the future, so it’s best to secure our future ourselves by saving and investing in it! I always invest in that one first.

  • Set up an automatic deposit

One way to ensure that you’ll be saving for each goal is to set up an automatic deposit! I’ve been doing this ever since my first job.

I would assume most places have the option to hook up more than one bank account, so you could have $20 going into your savings account and the rest going into your regular checking account. Amounts will obviously vary depending on your goals.

This will make sure you don’t forget to save and accidentally use the money intended for your savings accounts! It also makes it super easy because you don’t have to do it every time you get paid.

However, if your job doesn’t offer this option, you may need to see if your bank can do it or set up a payday routine and do it yourself!

If you’re looking to get ahead of your financial future, the next step for you may be paying off debt, check out these blog posts to get started!

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How to Successfully Budget With Multiple Bank Accounts

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