In the money culture of the current world, most of us are used to having our finances housed in financial institutions such as federal banks or credit unions. There are several types of accounts that serve different purposes for managing your money, and if you’re an adult with a debit card and a regular job, you’re probably familiar with some of the basics. But what exactly are the main types of accounts, how many should you have, and how can they work together when it comes to managing your finances?
A checking account is meant for expenses that occur on a regular basis, such as utility bills, loan payments, groceries, and other living expenses. One financial strategy is to have two checking accounts. You’ll use one for bills that are regular and consistent on a monthly basis such as your mortgage, electric bill, and car payment. You should not get a debit card for this account in order to keep from spending the money you set aside specifically for these bills on other things. Your second checking account will be for flexible spendings such as grocery shopping, gasoline, and recreational expenses. This secondary checking account will have a debit card associated with it.
Basic Savings Accounts
Your basic savings account is meant for setting money aside for either emergencies or a specific purpose. You could have as many savings accounts as you have savings goals, but keeping that number small will help you create more momentum as you save. An emergency savings account would be money set aside specifically for any unexpected expenses, while the targeted savings accounts can be for specific savings goals you hope to bring to fruition within the next five to ten years, such as saving for a down payment on a house or …How Many Bank Accounts Should You Have? Read More