If you only a checking and savings account you're doing budgeting all wrong.

Why Anything Less Than 6 Bank Accounts is Self-Sabotage

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Repeat after me: Money flows to me easily. 

Yes, you read that headline correctly. If you have less than six bank accounts, you are setting your family up for self-sabotage. My family and I have a total of eight bank accounts and I wouldn’t have it any other way.

Let me guess. Most of you reading this probably have only 2 accounts – a checking and savings account. Some of you might have a third savings account but that’s just about it. First of all, good for you for having a savings account. And even better if you actually have money in that savings account. There are some people who can’t even say that much. However, if you only have the one savings account I think it’s safe to say you are doing money all wrong. The reality is all of life’s expenses and circumstances can’t just fit into two categories so why do we think we can fit them all neatly into just two bank accounts?

I’ve learned that budgeting gets extra tricky when all your money is dumped into the same bank account; especially when the money has different purposes. We always ended up spending money we shouldn’t have because when all the cash flowed into the same checking account it looked like we had more money than we actually had. 

We remedied that by opening multiple bank accounts. We opted to open a majority of them with Ally Bank because they offer free checking and savings as well as a higher interest rate. Plus, it’s an online bank so the many isn’t too readily accessible that we can spend it easily but accessible enough that we can get it when we really are ready to spend it. It really does just make budgeting much easier. So here are the multiple bank accounts I believe are essential for families.

Emergency Savings Account – Just like the name implies, this is used for emergencies. For example, use for emergency medical care, “OMG I’ll lose my job if  don’t buy this,” or  “Oh my God, I just might lose the house if I don’t pay for this now.” You know, extreme emergencies.

Regular Savings Account – The regular savings account can be used for things you want to buy sooner rather than later. For example, maybe you want to buy a $600 mattress. You’ll continue collecting money in this account until you have the cash to buy that mattress.

Primary Checking – This is the first stop for all your money coming in (atleast it is for my husband and I). All our paychecks get deposited into this account and then we have automatic transfers set up for the money to be distributed into all our saving accounts. It’s also the account used to pay rent, electric, cable, health insurance etc.

A minimum of 6 bank accounts is a necessity. Find out why. Share on X

Car Emergencies – I don’t care how new, safe or reliable your car is. At some point you will have car issues. In fact, I think it’s one of the few guarantees in life. You are absolutely guaranteed to have car trouble at one point or another no matter how well you take care of it. Yet most of us are always blindsided and unprepared when it happens. Avoid the financial headache by stashing away money in a separate account.

Grocery – The other guarantee in life is that you have to eat. So that’s why you should consider having a separate account for groceries. Having a designated account makes it easier to not overspend.

Travel – Now we get to the fun stuff. Allowing Little Prince to see the world is very important to us. Sure, we get great deals from travel sites like Cheapoair or Google flights, but we still need to have money readily available to jump at those deals. We consistently put money into this account throughout the year to make paying for travel easier. It’s what makes all the bargain hunting and budgeting worth it. Of course, you don’t need to call this the travel fund. You can make it your family fun fund, self care fund, or whatever applies to your current situation.

Extra but unnecessary accounts

Taxes: My husband and I are both self-employed. That means, we end up paying our fair share of taxes. Every time, we get paid we stash some money in this account to make tax time less of a headache for us.

Baby: When I found out I was pregnant we started storing money away to pay for the medical costs associated with the birth. Then we used that money to save for little prince’s future aka his future fund. (I’m anti college fund. More on that here.) 

So there you have it. The multiple bank accounts that every family should have to be successful and avoid self-sabotage.

How many bank accounts does your family have? Has your family found budgeting easier with minimal accounts or do you think you’d managed better with more?

TERRIfic Quip – If you don’t buy the things you need, you’ll soon have to sell the things you need.

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  1. We each have multiple accounts, we don’t co-mingle money. I have multiple savings, checking, business and college funds or my kids and savings accounts for them.

  2. Well…DAMN! Did you just slap the Sh**T out of me? I do have 4 accounts. 2 checking and 2 savings but after you just gave me a butt whoppin’ I will need to get 6 more!!! I have my primary account where all the funds go and then I have the rest setup on automatic transfers. One checking to pays, the other checking for misc spendings etc, one savings account for “Christmas”shopping and the other savings account toward the purchase of our home. Didn’t think about emergency acct, car account. WOW! yea.. That’s for the beaten! I deserved it.

  3. I’ve never thought of having this many accounts but I think that you should separate your money, so you are not pulling from the same account. You are right we never think about things we may need for our car. Yes to the emergency fund, a lot of people don’t have this account and have to rob Peter to pay Paul.

  4. When it comes to budgeting, it’s whatever will make it easier for you to manage your money. I never thought of having that many accounts and honestly more doesn’t help me (I always have to be the odd ball), but I do know a lot of people it can help. We have 3 accounts total for our household and then both my hubby and I have seperate checking and savings for our businesses. Oh and our personal savings. It works for us. We have our budgets down to a science and use quicken to manage how we’ll allocate money each month.

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