Many people accept that it is essential to open a savings account, but they assume they only need one. However, financial analysts claim that it is a wise decision to open multiple savings accounts. They assert that it is a useful means to keep yourself focused on the specific goals you want to achieve. Here are the reasons why you need multiple savings accounts:
Easier tracking of progress
It is easier for you to track your savings goals if you have multiple savings account. Having one only helps you to focus on your bank accounts, thereby losing sight of your financial goals. For instance, if you want to buy a new house, go on a trip and invest some money, you can have different savings accounts for them. This way, you will see how much you have saved for each goal and how much is needed to complete it. You will get clearer visibility about your finances from doing this. Also, you will be able to keep yourself in check and inspect your spending pattern for any loopholes. If you are the type that easily falls into the habit of reckless buying, having multiple savings accounts helps put boundaries in place. Altogether, you will find that you can put all your fingers on your finances because it is no longer elusive. When you want to have multiple active bank accounts, you should always read finance online reviews to know which banks to open the accounts and what benefits you can get from the accounts. This way, you will be able to maximize the opportunities that come with having multiple bank accounts.
Helps you automate your savings
Putting all your savings in one account can make you fall into the temptation of thinking you have more than enough and put you at the risk of misspending it. However, if you have multiple savings account, you would automate transfers into each account from your income, before you remove any scent. You can tell your bank to automate your savings, or you can use apps that allow you to do such. If you are using an app, you should ensure the app is safe to use. Pick a schedule that works for you and be faithful to it. Do not stop the automation, except you are in a dire need with no way out.
Greater financial discipline
Having multiple savings accounts helps you inculcate a strong financial discipline. Besides the fact that it eliminates misspending, it makes you financially accountable to yourself. Once you start this habit of saving in different accounts, you will find that your financial discipline will increase. You will grow out of opening your purse every time to do something. Rather, you will begin to look for innovative ways to carry out your project at minimal cost but with the highest returns. You will have more freedom to set greater financial goals for yourself and the capacity to see those goals through. Also, you will learn more ways on how to make the most of your life. For instance, you will begin to see the power of relationships in executing financial projects and how a little tweak in your lifestyle can put more money in your pocket.
Utilize available bonuses
Most banks employ the strategy of offering bonuses if people open new accounts. Some of these bonuses, depending on the bank, are much sometimes. However, you need to keep operating the accounts you have opened and keep a certain amount in them. At the end of the day, the bonus will be worth it. Besides, you can use these bonuses as leverage to achieve your savings goals faster. Ensure that you open your savings account with customer-friendly banks that you can easily reach out to if you encounter any issues.
Insure your money
Another advantage of owning multiple savings account is the insurance you will get from the Financial Services Compensation Scheme (FSCS) in the UK, which is an equivalent of the Federal Deposit Insurance Corporation (FDIC) in the USA. This insurance is worth 100 per cent of the first $50,000 and significant percentage of subsequent sums. If your original savings is worth more than this, it is advisable to split the money between different accounts. The worth of the insurance the FDIC provides is enough to incentivize you to start the ownership of multiple savings account.
Considering the above reasons, owning multiple savings account is a win-win for you. However, you cannot ignore the stress that comes with managing your finances once you do this. As such, you also have to learn how to manage your accounts in a way that does not leave you confused than ever. You can use a spreadsheet to keep track of each account’s operations or to make it simpler, you can use an app. You also get to keep your accounts in a single place. For the easier reach of records when you need them, you can go to the old school way of documenting with pen and paper.