All My Bank Accounts
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I may have also many bank accounts. Are you familiar with the envelope method? You know, that budgeting method where you put all your greenbacks in separate envelopes for each need? Well I might practice that with banking company accounts. I have a fleck of a collection.
How many banking company accounts exercise I take?
I have two dissever banks and with 6 accounts between them. This isn't fifty-fifty counting my investment accounts!
I know most people only take one primary bank, but having ii has served me very well. The biggest advantage to having two banks is to protect yourself in instance of identity theft. I've had my identity stolen twice, and the first time they got into my main bank business relationship. That was a pretty awful experience, and the only thing that kept me afloat was the fact that my other bank was spared from the set on.
Why So many?
Ok, It may seem like overload, simply each banking company account has a very special and specific purpose. And I need all of them! Well, I probably could consolidate, but I don't desire to!
Transactions
Ok, lets offset with checking accounts. I accept two of them. The first i is for all my regularly monthly transactions. This includes my direct deposit for my pay check and all of my bills. It also includes my ATM withdrawals for my weekly cash allowance. I apply information technology the same way most normal folks use their banking concern accounts.
Big Purchases (and Paypal)
My other checking account is a staging area for big purchases. I know that I'g going to need to purchase something big every few months or so (Currently I'g saving for a new water heater) and I demand a place to shop that money and so I don't spend it on other things. This is a great strategy to budget for those big expected costs.
I also utilize this account for Paypal for some reason. It seems similar my paypal should be tied to my main transactions accounts, and while that makes the about logical sense, it's not. The reason for this is that I initially set up my paypal for my Ebay Sellers account, and I was saving all the money I made. Therefore, it had to go to this depository financial institution in order to become into the right savings business relationship.
Related: A Tale of Three Vanguard Funds
Brusque Term Emergencies
The big known expenses have older meaner cousins. These are the big unexpected costs. Information technology's difficult to budget for them because you don't know exactly what, when, or how much it will exist. It may be as uncomplicated as a flat tire, or as complicated as broken refrigerator (or worse!). I take a special bank account ready to become with a few thousand dollars in information technology for just such short-term emergencies.
Long Term Emergencies
Unfortunately, a few thousand dollars isn't going to fix everything. That's not really going to help much if I lose my job, or if I tin can't work for some reason. Enter my long-term emergency fund. I currently take enough money in information technology to pay half-dozen whole months of living expenses or i full year of my mortgage. My goal is to become information technology up to 1 full year of living expenses.
Travel
We all know I dearest to travel. Then, of course I take a divide account dedicated to that! I put a little fleck of money aside each paycheck to fund my next adventure. I ordinarily have my trips planned out (at least in my head!) months in advance, and then I know how much I'll need. Arab republic of egypt is going to run me near five thousand dollars, then I have to put up a niggling more each month for that. But it'due south super fun to see my travel fund grow and know I'm getting closer and closer to that awesome trip!
Burn down Goals
This is the banking concern account that I'll probably become some question marks on from my personal finance friends, but hey, I take to do me. I have one savings business relationship that's dedicated to all the things I want to do once I quit my job. This includes going back to school, studying Tai Chi in China, ownership an RV, and all the other crazy stuff I want to do once I'g job independent. I need to salve up a whole lot of money for these things, and I know a lot of my finance friends volition tell me that keeping this much cash in a bank business relationship is a terrible idea. I know, it's not going to abound in the depository financial institution. Just this money isn't for growing. I accept investments for that. This money is earmarked for specific goals, and I don't desire to risk losing it.
Keeping Track of it all
I'thousand old fashioned. I keep track of all my bank accounts with pencil and paper. That doesn't piece of work for most people, because they are with the times (unlike me). Personal Upper-case letteris a not bad tool normal people to track all of their accounts in i place without resorting to my stone historic period methods!
What practise you have?
So now you all know my muddy little secret. I hoard bank accounts. Is this normal? Does anyone else take more than than two or 3 bank accounts? Permit me know how many you lot accept in the comments!
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