Having all of your family’s money in one bank account can make keeping track of your money easier, but it might not help your family meet its financial goals. While it might not sound right at first, having a few banks accounts can make your family’s financial life easier.
Instead of one big fund for everything — such as a checking account — you might be better equipped to meet several small financial goals with multiple bank accounts. If you’re smart about them, you might also save on fees and make more money off of your money.
Here are five bank accounts every family should have:
Start 5 bank accounts with regular savings
This is an account to hold money in and only use when needed. You can attach a goal to it, such as saving for a down payment on a house or a family vacation, or it can just sit around for life’s unexpected expenses.
Try to save up three months of living expenses in this fund in case of a short-term emergency.
Emergency savings
This account should be used as a last resort and is for big emergencies, such as losing a job and having enough money set aside for six to 12 months of living expenses.
Joint checking account
This is used to pay your regular bills and other family expenses, though not medical bills, which we’ll get to soon.
It’s an account you probably already have and is where most of your income should go first before it’s used to pay bills or move to other accounts. This account should at least cover your monthly expenses.
Spousal checking accounts
Each spouse should have their own checking account so they can buy something however they see fit. The amount shouldn’t be a secret from the other spouse, and it can be used as “fun money.”
If everything else in your budget has been paid for, then money in this account is each person’s spot to use as they’d like to.
Health Savings Account
Also called an HSA, this is a tax-free account to hold money for medical expenses, from prescriptions to hospital stays. There are some rules to understand before using an HSA, so ask your Human Resources department at work or search online for details.
If you’re spending a few thousand dollars a year on your family’s medical costs, then a tax-free HSA can make it less expensive.
How much money you put into these bank accounts is up to you, but do yourself a favor and make it easy by using direct deposit so that a specified amount of money is automatically deposited into each account each month.
