When Hoarding Your Pennies, How Many Savings Accounts Should You Have?

Saving money is not a singular pursuit.

Take a minute to think about everything you’re saving for. A down payment on a home. Cash for that overseas vacation. Funds to tap in case an emergency arises.

Chances are you’re stacking money for several things at once, and those are just the short-term goals. We won’t even get into long-term objectives right now, like saving for retirement.

You probably park your short-term savings in a regular ol’ savings account … or several. Some folks are fans of splitting their money into separate accounts for each goal, while others hoard all their savings in one place.

Financial personalities and habits tend to determine how many savings accounts a person has, says Holly Peterson, financial consultant and owner of Elite Retirement Strategies in Pocatello, Idaho.

“Some people are more financially responsible when they have multiple savings accounts set up for different goals or purposes,” she says. “Other people get overwhelmed moving money around and give up on the whole idea of saving. There is no ‘one-size-fits-all’ recommended method.”

So whether you have one account or a dozen, you’re not doing it wrong. Let’s explore these two approaches to managing various savings goals and how you can be a successful saver with whichever route is best for you.

Separating Savings for Better Financial Clarity

Designating specific accounts for specific savings goals helps many people keep their money organized.

Fo Alexander and her husband Ben, of Greenville, South Carolina, have seven different savings accounts. One is for their emergency fund. Another covers future home repairs or upgrades. Two accounts are for general savings. The other three are business related.

Alexander, founder of the blog and podcast Girl Talk With Fo, said having multiple accounts means they don’t have to guess or do math to know exactly how much money they have saved for a specific purpose.

“We wouldn’t manage [our money] any other way,” she said.

5 Benefits to Having Multiple Savings Accounts

  1. The money you save for each goal is in its own pot. You know exactly how much you have saved toward each goal, so when you withdraw money for, say, your vacation, you don’t have to worry that you’re dipping into your new car fund.
  2. Seeing how close (or far away) you are from achieving each savings goal can give you more motivation to save than if you just saw one lump sum in a solo savings account. Alexander put it this way: “Knowing that you’re saving for a house versus just saving gives you more incentive to reach your goals.”
  3. Different financial institutions offer different perks. You might enjoy the amazing customer service at your local credit union so you have an account there, but you also like having your emergency fund stored at an online bank where you aren’t as tempted to make withdrawals. Some banks offer cash bonuses to open new accounts, another lucrative perk.
  4. You and your partner or spouse might want to maintain separate savings accounts for personal goals. Multiple accounts might also make sense if you want separate savings for each of your children.
  5. Most savings accounts restrict how often you can withdraw money from your account. If you plan on making more than the maximum monthly withdrawals, having multiple accounts would be an advantage.

Make Multiple Accounts Work For You

When juggling several accounts, it can help to nickname each one.

“Putting a name to your savings increases your likelihood of success,” Alexander said.

She also recommends automating your savings allocations if you can’t keep up with making manual transfers. Before she was married, she used to have her employer transfer a percentage of her paycheck into specific accounts.

Now Alexander and her husband set time aside every other week to discuss their finances and put money into savings according to their goals.

Pro Tip

Don’t get so caught up contributing to your various short-term savings accounts that you neglect long-term goals, like saving for retirement or adding to your kids’ college funds.

Sticking With the Simplicity of One Account

Not all savers go the route of having multiple accounts.

Evan Sutherland, of Pullman, Washington, keeps all his savings in one account and uses a detailed budgeting system to stay on top of multiple goals, like saving for holidays, vacations and semiannual bills.

He and his wife, Nikayla, who collectively run the blog Budgeting Couple, use the popular budgeting software EveryDollar and create digital sinking funds to set aside money for specific savings goals.

A sinking fund is a pool of money you regularly add to over time to make a large expense more manageable or to make up for irregular income or expenses.

Among the different things they’re saving for, the Sutherlands regularly put money aside for vacations.

“Instead of having a travel savings account and sticking $ 80 a month into the travel savings account, we just budget for $ 80 per month,” he said.

By keeping track of how often and how much they’ve contributed to their travel sinking fund, they know how much money they can pull out for their next vacation. Sutherland said having multiple accounts on top of the budgeting system he uses would be redundant.

5 Advantages to Keeping All Your Savings in One Account

  1. You only have to keep track of deposits, withdrawals and account information for one account, saving you time and extra work.
  2. If your bank charges a monthly maintenance fee, you only have to pay that for one account rather than for several.
  3. Some savings accounts have requirements, like keeping a minimum balance. It could be easier to meet those requirements if your savings are in one account.
  4. You’ll miss out on potential earned interest by dividing your money into accounts that have different interest rates. You’d have better returns if you saved your money in one high-interest account.
  5. Even when your financial goals change, your savings account will always serve a purpose. If you open multiple accounts for non-recurring goals (like saving for a wedding), those accounts will be empty and useless once you’ve reached your target savings and withdrawn all the money.

Getting By With One Account

Sutherland’s savings approach shows you don’t have to open separate accounts to save up for separate goals. The key to working with one savings account is to have your own tracking system so you know how much of your money goes to each savings objective.

Sutherland recommends using budgeting software that allows you to set up sinking funds. If you’re not sure which software is right for you, check out our review of the eight best budgeting apps we could find.

You also don’t have to save for all your goals simultaneously. If you’re engaged and budgeting for a wedding but also want to buy your first home in a couple years, you can focus on the immediate goal first and then tackle saving up for a down payment after you say “I do.”

“There are many different methods available for saving money — but in the end, the best method for you will be different than the best method for someone else,” Peterson, the financial consultant, advises.

No matter how you do it, the most important thing is that you make saving money a priority.

Nicole Dow is a senior writer at The Penny Hoarder. She is saving to pay off debt and buy a house.

This was originally published on The Penny Hoarder, which helps millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. The Inc. 5000 ranked The Penny Hoarder as the fastest-growing private media company in the U.S. in 2017.

The Penny Hoarder

BEST DEAL UPDATE:

Sam's Club Membership Offer

When Hoarding Your Pennies, How Many Savings Accounts Should You Have?

Saving money is not a singular pursuit.

Take a minute to think about everything you’re saving for. A down payment on a home. Cash for that overseas vacation. Funds to tap in case an emergency arises.

Chances are you’re stacking money for several things at once, and those are just the short-term goals. We won’t even get into long-term objectives right now, like saving for retirement.

You probably park your short-term savings in a regular ol’ savings account … or several. Some folks are fans of splitting their money into separate accounts for each goal, while others hoard all their savings in one place.

Financial personalities and habits tend to determine how many savings accounts a person has, says Holly Peterson, financial consultant and owner of Elite Retirement Strategies in Pocatello, Idaho.

“Some people are more financially responsible when they have multiple savings accounts set up for different goals or purposes,” she says. “Other people get overwhelmed moving money around and give up on the whole idea of saving. There is no ‘one-size-fits-all’ recommended method.”

So whether you have one account or a dozen, you’re not doing it wrong. Let’s explore these two approaches to managing various savings goals and how you can be a successful saver with whichever route is best for you.

Separating Savings for Better Financial Clarity

Designating specific accounts for specific savings goals helps many people keep their money organized.

Fo Alexander and her husband Ben, of Greenville, South Carolina, have seven different savings accounts. One is for their emergency fund. Another covers future home repairs or upgrades. Two accounts are for general savings. The other three are business related.

Alexander, founder of the blog and podcast Girl Talk With Fo, said having multiple accounts means they don’t have to guess or do math to know exactly how much money they have saved for a specific purpose.

“We wouldn’t manage [our money] any other way,” she said.

5 Benefits to Having Multiple Savings Accounts

  1. The money you save for each goal is in its own pot. You know exactly how much you have saved toward each goal, so when you withdraw money for, say, your vacation, you don’t have to worry that you’re dipping into your new car fund.
  2. Seeing how close (or far away) you are from achieving each savings goal can give you more motivation to save than if you just saw one lump sum in a solo savings account. Alexander put it this way: “Knowing that you’re saving for a house versus just saving gives you more incentive to reach your goals.”
  3. Different financial institutions offer different perks. You might enjoy the amazing customer service at your local credit union so you have an account there, but you also like having your emergency fund stored at an online bank where you aren’t as tempted to make withdrawals. Some banks offer cash bonuses to open new accounts, another lucrative perk.
  4. You and your partner or spouse might want to maintain separate savings accounts for personal goals. Multiple accounts might also make sense if you want separate savings for each of your children.
  5. Most savings accounts restrict how often you can withdraw money from your account. If you plan on making more than the maximum monthly withdrawals, having multiple accounts would be an advantage.

Make Multiple Accounts Work For You

When juggling several accounts, it can help to nickname each one.

“Putting a name to your savings increases your likelihood of success,” Alexander said.

She also recommends automating your savings allocations if you can’t keep up with making manual transfers. Before she was married, she used to have her employer transfer a percentage of her paycheck into specific accounts.

Now Alexander and her husband set time aside every other week to discuss their finances and put money into savings according to their goals.

Pro Tip

Don’t get so caught up contributing to your various short-term savings accounts that you neglect long-term goals, like saving for retirement or adding to your kids’ college funds.

Sticking With the Simplicity of One Account

Not all savers go the route of having multiple accounts.

Evan Sutherland, of Pullman, Washington, keeps all his savings in one account and uses a detailed budgeting system to stay on top of multiple goals, like saving for holidays, vacations and semiannual bills.

He and his wife, Nikayla, who collectively run the blog Budgeting Couple, use the popular budgeting software EveryDollar and create digital sinking funds to set aside money for specific savings goals.

A sinking fund is a pool of money you regularly add to over time to make a large expense more manageable or to make up for irregular income or expenses.

Among the different things they’re saving for, the Sutherlands regularly put money aside for vacations.

“Instead of having a travel savings account and sticking $ 80 a month into the travel savings account, we just budget for $ 80 per month,” he said.

By keeping track of how often and how much they’ve contributed to their travel sinking fund, they know how much money they can pull out for their next vacation. Sutherland said having multiple accounts on top of the budgeting system he uses would be redundant.

5 Advantages to Keeping All Your Savings in One Account

  1. You only have to keep track of deposits, withdrawals and account information for one account, saving you time and extra work.
  2. If your bank charges a monthly maintenance fee, you only have to pay that for one account rather than for several.
  3. Some savings accounts have requirements, like keeping a minimum balance. It could be easier to meet those requirements if your savings are in one account.
  4. You’ll miss out on potential earned interest by dividing your money into accounts that have different interest rates. You’d have better returns if you saved your money in one high-interest account.
  5. Even when your financial goals change, your savings account will always serve a purpose. If you open multiple accounts for non-recurring goals (like saving for a wedding), those accounts will be empty and useless once you’ve reached your target savings and withdrawn all the money.

Getting By With One Account

Sutherland’s savings approach shows you don’t have to open separate accounts to save up for separate goals. The key to working with one savings account is to have your own tracking system so you know how much of your money goes to each savings objective.

Sutherland recommends using budgeting software that allows you to set up sinking funds. If you’re not sure which software is right for you, check out our review of the eight best budgeting apps we could find.

You also don’t have to save for all your goals simultaneously. If you’re engaged and budgeting for a wedding but also want to buy your first home in a couple years, you can focus on the immediate goal first and then tackle saving up for a down payment after you say “I do.”

“There are many different methods available for saving money — but in the end, the best method for you will be different than the best method for someone else,” Peterson, the financial consultant, advises.

No matter how you do it, the most important thing is that you make saving money a priority.

Nicole Dow is a senior writer at The Penny Hoarder. She is saving to pay off debt and buy a house.

This was originally published on The Penny Hoarder, which helps millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. The Inc. 5000 ranked The Penny Hoarder as the fastest-growing private media company in the U.S. in 2017.

The Penny Hoarder

BEST DEAL UPDATE:

Sam's Club Membership Offer

Treat Yo’ Self… for Pennies: 25 Spa Treatments You Can Do at Home

Want to know a secret?

I’ve never had a professional massage.

I totally get why they’re appealing, but they’re just not my jam.

Manicures, on the other hand?  Heck, yeah.

My tombstone will read, “How do my nails look?”

I’m not gonna lie, getting my nails done every two weeks or so costs a pretty penny (or 6,000, to be exact), but it’s the one luxury I budget for even if it means using cheap body wash or mascara.

The main reason I go to a salon to get my manicure done is because there’s no way I could do it at home. I’m basically the most uncoordinated person on the planet, so I’d end up with acrylic powder in my eye and nail shellac on the walls.

For all other spa-type treatments, though, I’m strictly a DIY gal.

Here are some of my favorite ways to indulge myself easily right in the comfort of my own home — without spending a fortune.

15 Ways to Get Your DIY Spa Day On

  1. Everything you’ve heard about coconut oil is true. Skip the expensive body lotion and deep conditioner and use this low-cost alternative instead. An entire jar will run you only about $ 4 and will last for months.
  2. Apply an avocado or egg mask to your hair at the beginning of your spa routine, then wrap your head in a warm towel. Let it work its magic for at least 20 minutes while you give yourself a lip scrub. One egg will set you back 10 cents, and an avocado is about $ 1.
  3. Korean sheet masks make your skin look amazing, but they can be awfully pricy. I picked up a handful at my local dollar store for a buck each and discovered they work just as well as the expensive brands. If you buy in bulk, you can save even more pennies.
  4. Speaking of masks, if you use Lush cosmetics or know someone who does, hang onto those little black pots and bottles the products come in. You’ll score a free face mask when you turn in five empties. That’s a savings of at least $ 9.95!
  5. Clear up blemishes and reduce fine lines with a 60-cent container of plain, generic-brand yogurt! Whether you use it plain or jazz it up with extras like a dash of honey or oatmeal, your pores will thank you.

  1. After rinsing off the mask, I like to give myself a five-minute face massage. It’s surprisingly relaxing — and totally free!

    1. If you’ve got a few dollars to spare, sign up for a Sephora Play! subscription. For just $ 10 per month, you’ll get a box delivered right to your door filled with deluxe product samples and a bonus fragrance.
    2. This homemade eucalyptus sugar scrub is both energizing and effective. For less than a dollar’s worth of sugar, you can make a batch to slough off dry, dead skin, leaving behind a tingly clean that smells luxurious.
    3. For a change of pace, I like to mix things up and exfoliate my skin with this three-ingredient coffee body scrub that you can make with the (free!) used coffee grounds left over from your morning brew. It reportedly also reduces the appearance of cellulite. (Don’t tell me if that’s just an old wives’ tale — I don’t want to know.)
    4. Sometimes my skin just isn’t up for a harsh scrub down. That’s when I whip together this gentle scrub that rinses off easily with warm water. Not bad for 60 cents worth of oat bran. (I’ve tried it without wheat germ, and it still works great.)
    5. If you plan to shave during your spa time, try dry brushing first to prevent ingrown hairs and razor-burn bumps.
    6. If I’m going to sport beautiful nails, the rest of my hand better keep up appearances, too. This lemon-sugar hand scrub is so easy to make, smells amazing and costs less than $ 2. After you rinse it off, slather on some hand lotion and take a minute to admire your, er, handiwork.
    7. Do you know why every spa scene in a movie or on TV depicts someone with cucumber slices on their eyes? Because it works! For about 75 cents, you’ll have all the slices you need, plus leftovers for salad. (Tea bags dampened with a bit of cool water are also a great way to reduce puffy, irritated eyes if you’re fresh out of cukes.)

  1. I’m cursed with dark skin patches on my face (thanks, hormones!) that make me look like I blended my foundation with my eyes closed. One way I keep the discoloration in check is by dabbing a few pennies worth of lemon juice and honey on the affected areas. You can blend the ingredients together or apply them one after the other. Leave it on for about 20 minutes before rinsing off with warm water.

    15. Treat your feet to a nice soak with whatever gentle bath wash you have on hand. Follow it up with a homemade foot scrub that costs less than $ 1. Simply stir one part coconut oil into two parts sugar and scent with a few drops of essential oil. A dash of lemon juice adds extra oomph. To kick (ha!) things up a notch, slather on some lotion and cover your tootsies with thick socks while the moisturizer works its magic.

10 Easy Ways to Spa-ify Your Surroundings

While planning your day of indulgence, don’t forget to design your own relaxation grotto. Give your bathroom a deep clean and then:

  1. Splurge on a soft, thick towel.
  2. Pick up some pretty containers from the dollar store to hold all the scrubs and potions you make.
  3. Scour thrift shops for a fluffy bathrobe to wear while relaxing.
  4. Get some inexpensive candles to create ambience during bath time — or make your own.
  5. Set a plant or vase of flowers in the bathroom, because greenery makes everything better.
  6. Cover your bathroom window with frosted contact paper to diffuse bright sunlight that might harsh your mellow.
  7. Put a few sprigs of eucalyptus on the corner of the bathtub to create a clean, refreshing scent when you run the hot water.
  8. Buy a bathtub overflow drain cover so you can fill the tub extra deep and soak all the way up to your chin.
  9. Queue up this chill Spotify playlist.
  10. Make some cucumber-infused water to sip as you spa.

Want even more DIY spa ideas? Check out how to make your own sea salt spray, body lotion and more.

Disclosure: We don’t hesitate to pick pennies off the sidewalk when we spot them. But the affiliate links in this post help our earnings grow even quicker. Plus, it’s a lot cleaner than sidewalk money.

This was originally published on The Penny Hoarder, which helps millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. The Inc. 5000 ranked The Penny Hoarder as the fastest-growing private media company in the U.S. in 2017.

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BEST DEAL UPDATE:

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