Everyone needs to have money in savings. Learn how to use multiple electronic savings accounts to save more money for your family.
Do you have a savings account? How many savings accounts do you have? Would you believe it if I told you we currently have 20 savings accounts and are still adding more? We’ve been keeping multiple savings accounts for almost a decade now. It’s been 5 years since I first wrote this post and we’ve continued to open more accounts each year. (As of May 2020, we are up from 12 to 15 to 20 savings accounts.) It’s a simple thing to set up but has had a great impact on us financially. These electronic savings accounts have helped us reach many financial goals quicker than we anticipated.
Let me explain why we have so many savings accounts and how it works for our family.
This post may contain referral links. You can read more in my disclosure policy.
First of all, it’s important to know that all of our savings accounts are in one place – at Capital One 360. Capital 360 is a FDIC insured online banking program that links directly to your checking account. Yes, I’ve looked at other online accounts but so far, this account is the best one I have found.
We do have one savings account at our bank but all our other savings accounts are located at Capital One 360. For us, our electronic savings accounts serve as our digital envelopes. If you are familiar with Dave Ramsey, you’ll understand what I mean.
Having so many different savings accounts allows – and encourages – us to put money towards a specific purchase.
The one savings account that we keep at our bank serves as our personal overdraft protection from surprise bills. We keep just a little bit in there so we can move money around as necessary when it’s time to pay our bills. We’ve found that this type of slush fund works well for us.
After that, the rest of our savings accounts are at Capital One 360. We use them for several reasons.
First of all, it’s convenient that our accounts can be accessed anywhere but the online aspect keeps us in check. We can’t drive to the bank and withdraw the money we are saving. We have to plan for our purchases since it has a 3 to 5 day transfer delay to our bank. You can transfer between Capital One accounts instantaneously however.
We also like Capital One because it links to our checking account. We have set up monthly automatic transfers from our checking to a couple of our Capital One accounts. It’s nice to have savings on autopilot.
Finally, Capital One gives more interest than most accounts. I’ve seen several accounts that are at 0.01 percent interest. Capital One is currently at 1.5 percent interest with their premium savings accounts (May 2020). No, it’s not a lot compared to investments in mutual funds, but these accounts are for specific savings goals that we want to be able to access at anytime. Knowing that, it’s still good to be making a little bit in interest. With the higher interest, our emergency fund earns $6 every month just sitting there, and our new car fund gains over $15! I love earning free money for savings.
(Bonus: As of May 2, Capital one is also offering a $25 bonus when you open a new account with at least $250. Here is the link to open an account.)
Now, am I suggesting that you should run out and open 20 savings accounts of your own? By no means! We started with our emergency fund and have slowly added accounts as the need arises.
What I love about having so many different savings account is that I’m no longer tempted to take from a specific savings account when it’s already earmarked for a specific goal. What goals are important to you? What do you specifically want to save for? Start by answering those questions and setting up corresponding savings accounts.
It’s also important to know that we don’t add to all of our savings accounts every month. Some we budget $100 a month for while others we add only $25 when we can. Several of our savings accounts are built solely by extra income that we earn. Some of these accounts grow when we get a tax refund. Remember, there is no certain amount that you have to save. The most important thing about saving is simply that you are saving.
So you can understand how this works for us, here is a look at all the savings accounts that we currently maintain.
Savings Account 1 – Emergency Fund
The first, largest and most important savings account we have is our emergency fund. We are fully funded with 3 months of our living expenses. We reached that goal early on our marriage and I am happy to say that we have never touched it. Still, it is amazing how an emergency fund helps me sleep better at night. I know God is in control but I also know we are called to be good stewards of all He has given us. For that reason, we plan and prepare for the emergencies that will happen at some point in time. If you don’t have anything set aside in an emergency fund, set yourself a goal of $1000. After you reach that point, increase it to 3 to 6 months of living expenses.
Savings Account 2 – Bills
The second most important savings account we have is a slush fund for our bills. We budget for our monthly bills but we all know that utility bills fluctuate. Having a cushion in this account means we are prepared for those bill overages whenever they come. This account also allows us to set aside the money for bills that are due quarterly or once a year.
Savings Account 3 – Car Repairs
We have also set up a separate savings account for car repairs. Whether it is new tires or an unexpected car repair, it is good to have money set aside for those inevitable car repair bills. We have budgeted money every month to replenishing this account because there are always car expenses for which to pay!
Savings Account 4 – New Car Fund
Along similar lines, we are also saving in our car fund account. We recently used a large portion of this account to pay cash for a new to us used mini van. It was an amazing feeling to be able to pay cash for a vehicle! Now, we are saving to replace my husband’s Tahoe which already has 260,000 miles on it. We would love to never have a car payment again so are working diligently to make this happen with this savings account.
Savings Account 5 – House Projects
We also have a savings account for house projects. Goodness knows, the list of home projects never ends! Whether it is projects like new carpet or updating light fixtures, we set money aside for any house projects that may arise. We continually add to this account because as soon as we finish one home project, there is another one on the list. Any other homeowners feel that way?
Savings Account 6 – Basement Remodel
While this could be grouped with house projects, we have a separate account for our biggest home project. We currently have a large and unfinished basement that we would like to finish someday. It will probably happen in stages over a period of years but we are adding to this account every month so the money slowly grows.
Savings Account 7 – Colts Ticket Account
My husband is a Colts season tickets holder so he has a Colts savings account. He earns money selling extra tickets so he can continue watching his beloved Colts play. Very minimal money comes out of our budget for this expense but we do have to plan ahead so he can pay for the tickets ahead of time. Your husband may not be a Colts fan but if he (or you) have a hobby that costs money, having a savings account for that expense is helpful.
Savings Account 8 – Blog Earnings
I’m excited that I have a savings account for my blog earnings. Since I started selling custom books and now that my blog is growing in size, I am actually earning money from blogging! I’m thrilled to be able to contribute to our family by blogging. I divide my blog earnings into various things over the course of the year. Some is reinvested right back into this blog, while I tithe a portion to special mission projects. I use some of my blog earnings to make an extra mortgage payment or contribute to my Roth. Until I make those payments, all my earnings sit in this account.
Savings Account 9 – Travel Fund
We have a savings account for our summer vacations and family travels. We earn free hotel nights through one credit card throughout the year but we also set aside money for other vacation expenses. Since traveling is the only way to see my spread-out family, vacations are something we choose to spend our money on.
Savings Account 10 – Christmas Gifts
We also have some money put aside in a Christmas gift account. We all know that Christmas comes every year so why not save for it year round? Most of our Christmas shopping is actually covered by free Amazon gift cards I earn throughout the year. We also shop year round for good deals on Christmas gifts that fit for our family. It’s a simple way of making this Christmas savings account stretch further.
Savings Account 11 – Someday Europe Trip
After years of adding to this account, we emptied it last summer to buy Alaska cruise tickets! We had been saving since our wedding and made the Alaskan trip happen for our 10th anniversary, thanks it large part to this savings account. Now, we are saving for our next big trip – a someday Europe trip. When we get surprise gifts, I try to tuck a little bit into this account. Maybe we’ll take a trip to Europe for our 25th anniversary?
Savings Account 12 – New Furniture / Appliances
This is an account we add to only occasionally but we do try to add to it as often as we can. When we moved into our new house 3 years ago, we bought a new upright freezer, a washer and dryer set, and a couch and love seat – all thanks to this account. We were able to pay cash for all of those big purchases because we set the money aside in this new furniture account. It makes shopping for new furnishings much easier when you know the cash is there! Of course, we still watch for sales to stretch our money further.
Savings Account 13 – Outside Projects
My husband does a lot of work outside our house and this account focus on the house projects outside. This account is where my husband saves for a replacement mower, lawn supplies, mulch and all those other sorts of outside things.
Savings Account 14 – Extra Mortgage Payment
We recently refinanced our mortgage and our payment dropped $75 a month. We are putting the difference into this savings account and making an extra payment on the principal every quarter. I ran the figures and we saved more by paying quarterly as opposed to monthly (something with compound interest that I don’t quite understand). The extra mortgage payments are automatically put in this account so we can keep paying down the principal.
Savings Account 15 – Extra Income
While my extra earnings go into blog income, any extra money my husband earns goes into this account. It simply sets the money apart until he is ready to spend it on some project or trip.
Savings Account 16 – Disney
There isn’t much in this account but we’ve talked about traveling to Disney just once with the kids. I’ve never been but I hear it is fun! We wouldn’t go until our youngest is at least 4 so we have time. Each year, I’m trying to tuck a little money from my blog earnings into this account. This account helps us earmark the someday Disney money.
Savings Accounts 17, 18, 19 and 20 – Individual Kid Savings
As soon as our son was born, we set up a savings account for Nathan. We did this for our other children as they were born so all 4 kids now have their own savings account. Any money gifts that they receive (since all 4 kids are still quite young), we place straight in their savings fund. We have considered starting a college fund but until we finish researching and make our decision, a bit of their money is set aside.
There you have it. Those are the 20 savings accounts we currently have but we are probably not done yet. There are always new things to save for and these accounts help us reach our goals!
I believe it is a necessity for every family to have money in savings. The where and how much is up to you to determine. I hope reading how we use our different savings account has given you some encouragement to work towards your savings goals.
I’d love to know how many savings accounts you have. Also, what are you saving towards right now?
(If you are interested in checking out Capital One 360 for yourself, this is my referral link. You are by no means obligated to use it. I’ve been asked about how and where we save so wanted to share this article. Referral or not, I would highly recommend Capital One 360!)