Many people worldwide don’t have enough information when it comes to saving their wealth the correct way. There are many financial advisors out there that can help these people find a great way to budget.
However, there has been an ongoing debate on whether people should have one, two, or even more savings accounts. While having more than one savings account may seem strange for some people, it makes sense once they understand all the possibilities and opportunities of having multiple accounts.
The following article covers the benefits of having one or multiple savings accounts. Additionally, it’s going to debate whether having one or two savings accounts is the right option for most people.
Why Would Someone Have Multiple Savings Accounts?
There are many reasons why people open many accounts for their savings. While the case depends on the person and their goals, here’s a list of common reasons why someone would choose to have several accounts open:
Tracking
If the person has several saving goals, it may be hard to keep track of all the money if it’s all in the same account. In essence, someone who has different goals (buying a car or having emergency funds) may benefit from separating everything since it makes it easier to track expenses and progress.
Having everything in one account may make it harder for someone to reach their savings goals. If someone went for a vacation, for example, they may be tempted to use part of the savings that were targeted for another goal, such as emergency funds.
Not only does that defeat the purpose of saving, but it can also disorganize everything if the person doesn’t pay enough attention.
Misspending
Having everything in one account may make someone feel tempted to spend more money than necessary. However, if someone opens multiple savings accounts, they’re likely going to have a lower balance in each, making the person second-guess their decision to spend.
In essence, having multiple accounts helps a bit with the desire of spending savings unnecessarily.
Automation
Someone who has multiple savings accounts may set up automatic transfers from their checking account to their savings accounts, making it much easier for them to keep those accounts growing automatically.
Money Insurance
The FDIC (Federal Deposit Insurance Corporation) offers up to $250,000 in money insurance at some covered banks. It’s important to note that any amount of money over $250,000 may not be protected if the bank fails.
If the person has more than $250,000 in savings, they may split them over different savings accounts to insure everything.
Bonuses
Some banks offer new customers bonuses once they open a new account. Logically, opening more than one savings account increases the chance of earning more bank bonuses over time.
Should People Have More than One Savings Accounts?
It can be beneficial to have more than one savings account since it allows people to protect their wealth more efficiently and keep track of their goals.
However, the number of accounts someone may open depends on their needs. Some people don't mind having one account for everything, whereas others prefer to have two, three, or more.
In the end, it mostly depends on what the person’s goals are when building their wealth. It’s important to note that there’s no limit regarding how many savings accounts a person can have as long as they can manage them all efficiently.
How Can Someone Manage Multiple Savings Accounts?
Managing several savings accounts may seem like a hassle. However, as long as the person is organized, it may not be a problem.
One efficient method is to have fee-free accounts so that the person doesn’t need to keep track of monthly fees. On the other hand, they may use a spreadsheet or app that helps them manage their accounts more easily.
Bottom Line
There are many strategies people can use to save their wealth, including finding an investment with a realistic return, but it mostly depends on their needs. With that being said, having two savings accounts can be highly beneficial for those who have trouble keeping track of their saving goals for the future.
The best way to ensure the person is making the right decision is to seek counsel from financial advisors in Pittsburgh PA. These trained people can help investors and the general public achieve their saving goals for the future.