Editor’s note: This is a transcript of the audio file.
A lot of people think of savings accounts as a place to set aside money for a rainy day, but they’re also a great tool for saving up for a specific financial goal such as the down payment on a house or your next vacation. Problem is, most people have more than one financial goal. The solution? Setting up multiple savings accounts. I’m Claes Bell with the Bankrate.com Personal Finance Minute.
Fortunately, it’s much easier to manage several savings accounts than it used to be. First of all, many banks allow you to set up multiple savings accounts at the same bank, and even offer online banking tools that simplify the process.
Direct deposit can also be a big help. Many employers allow employees to have their paycheck split up into several different accounts. That way, you could put twenty five dollars out of every paycheck into your vacation fund, and fifty into your new-car fund, without having to manually transfer the money every few weeks.
If your employer doesn’t allow splitting up your paycheck into multiple accounts, many banks allow you to set up automatic transfers from a checking account to a savings account to make saving easier.
Whatever method you use, the key is to make saving automatic, so you won’t be tempted to blow the extra cash and miss out on your savings goals. For more on this and other personal finance topics, visit Bankrate.com. I’m Claes Bell.