I have 8 bank accounts — here’s how they help me control my spending and savings

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I have 8 accounts at 5 banks. Yes, you read that right.

One reason for having so many bank accounts is that I live and work in China to pay off debt in the U.S. I’m banking in two countries.

Each account has a different purpose. I have accounts for:

  • Bills set on automatic payments
  • Everyday spending for items like groceries, hair appointments, movie nights and metro fare
  • Three months’ worth of U.S. bills, mostly grad school debt
  • An emergency fund for unexpected events in the U.S.
  • A travel fund because globe-trotting enriches my life like nothing else
  • My salary, which I disperse to the other accounts

Having multiple accounts, however, isn’t new for me. I spread the wealth among different banks even before I flew 7,000 miles away from home. Several accounts helps me control my spending and achieve my goals. Here’s how:

1. Separating my money takes the guesswork out of budgeting

If I kept every dime in one pot, it would be too hard for me to determine what money is for what. Instead, I do the tough work up front of budgeting on paper and physically dividing the money. Nothing brings me more peace of mind than knowing that next month’s bills are already accounted for in their own account. Then I can spend money on everything else guilt-free.

Separation also simplifies my expense tracking. I put a certain amount of spending money on a debit card each month so that I can easily check the balance any time. If it looks like there will be more month than money, then it’s time for me to curb my spending or take on a little more work. Otherwise, once the money is gone, it’s gone.

2. Separating savings and spending money reduces impulse buys

I had no idea how to handle money as a recent college grad. I had a checking account, savings account and two maxed-out credit cards. Since my small savings account and my checking account were connected and I liberally transferred funds when I saw something I wanted to buy, I struggled to build my savings.

Then a personal finance expert suggested opening an online savings account to help differentiate my everyday spending money from my savings. This simple method worked so well that when a six-month premium came due for my car insurance, I forgot I had already saved cash marked especially for this event in my online account.

I know my limitations. Willpower won’t last. Putting up barriers between me and funds for the future was (and still is) the best decision for me.

3. Naming accounts helps me recall my goals

Naming my different accounts by their goals brings the future to the present for me. It snaps me out of “I want it now” mode and reminds me that I’ll appreciate the money more down the road.

If I know I have a sun-filled beach trip planned for wintry January, for example, I’m less likely to steal from the “Bali Vacation Fund” for a t-shirt I really don’t need today. Seeing my goals front and center keeps me on target.

Should you try multiple bank accounts?

The divide-and-conquer method is not for everyone. But deploying different accounts for different purposes has saved me from myself, helped me pay bills on time and helped me stash cash with less temptation to spend.

Consider opening more accounts if you struggle with overspending or saving. You could choose an online bank like Capital One or Ally that allows you to have multiple savings accounts with one bank.

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