Saving money is essential to achieving your financial goals, and having a good strategy can make the process easier.
That’s why I have seven savings accounts to separate my goals, automate my savings and keep track of my financial progress.
But having multiple accounts instead of just one also comes with some challenges that I’ve had to overcome throughout the years. Here are just a few of them.
1. It requires more legwork
Having a savings account for each of my savings goals makes it easier for me to see how much money I have earmarked for each one. But keeping track of all of those accounts takes time.
In December, for instance, I spent some money booking an upcoming trip, bought some Christmas presents and paid for an unexpected car repair. Instead of making one combined withdrawal for all of those expenses from a single savings account, I had to process three separate transfers.
At the end of the month when the interest I earned on each account posted, I had to update the balance on all seven accounts instead of just one.
It’s also required more communication with my wife to make sure we’re on the same page as to where we stand with each individual account.
2. It can get out of hand
While I currently have seven savings accounts, I’ve had many more over the years for various goals including a down payment on my home, preparations for a new baby and more. At times, I’ve felt entirely overwhelmed with the number of accounts I had.
One month, I accidentally took more withdrawals from an account than I was allowed and was slapped with a $15 fee. Fortunately, my bank waived the fee, but it made me realize that I needed to simplify things. Every time I’ve felt overwhelmed like this, I’ve had to close some accounts and consolidate others.
Being ambitious about your savings goals is important, but it’s also important to know your limits and avoid making things more stressful than they need to be.
3. It limits my banking options
It’s easier to open multiple savings accounts with an online bank than a traditional one. This means that there are only a handful of banks I can use to implement my savings strategy.
After trying a few, I’ve finally found one that provides all the features I want — but it took years of frustration before I finally found the right one.
Finding the right bank for your needs is important, and making sacrifices for multiple accounts may not be worth it for you. So if you’re considering opening an account with a bank that offers a multiple account feature, I recommend making sure you look at what you might need to give up in order to get it.
4. It makes switching banks tough
Switching from one bank to another can be a pain. It takes time to transfer your money and update your recurring charges.
The last time I switched accounts, the whole process took several months because I wanted to make sure I didn’t miss anything.
Adding more accounts into the mix makes the process even more complicated. Because I have automatic transfers going into most of my savings accounts from my checking account, I had to cancel each one individually with my old account and set up new ones with my new account.
5. It changed my saving habits for the better
Having multiple savings accounts adds a little complexity to my life, but it’s been worth it.
Seeing my savings progress every time I log in to my online account reminds me that I’ve decided what is most important to me and keeps me focused every month when I set my budget.
Over the years, I’ve achieved several savings goals and have been able to close some accounts once I reached them. I anticipate doing the same in the future, and it’s exciting to see that progress as it’s happening.
The bottom line
Having multiple savings accounts isn’t always easy, but if it fits your saving style and can help you better achieve your goals, it’s worth the extra effort it takes to manage them.
If you’re considering opening multiple savings accounts, take some time to compare accounts. Also, make sure you have a plan in place for how you’ll keep track of them.