Multiple Checking Accounts?

[Sian]

I just had a thought. I have 1 checking account and 1 savings account with the same credit union. Currently the savings is used as normal as well as the checking. I am in the process of restarting my debt payoff . I was thinking that the current checking account that I have, which I have a lot of auto payments coming out of. I want to open another checking account.

The first account is for all the bills that I have. Example, if I make $4000, and I pay $1000 a month for my debt, I want to put just $1000 in that account. The other checking account is for the day to day (sinking funds?), insurance, groceries, cell, gas, rent, etc (for example $2000). The savings would receive $1000.

This way I would be clearer to me as to what is going where.

BTW, I have ADHD, and when I look at my current statements, it looks like a jumble and takes forever for me to go through. (I currently spent about 4 hours doing this).

I'm actually thinking of doing this for savings as well. 1 for emergency fund and the other stuff for things I need now (property taxes, tires, etc.)

What are ya'lls thoughts?

[kork13]

I'm one to say that you should do what works & makes sense for you. I've heard of this strategy before, and is by no means a bad option. Another way I've heard it explained is that it ensures your recurring bills always get paid (debts, rent/mortgage, car, utilities, etc) then you have to live off of what's left in the other account. It's a half-step toward a functioning budget.

And FWIW, I personally keep a few different savings account that each have assigned functions as well... Emergencies, home repairs/taxes/insurance, etc., plus a generic "everything else" fund.

I think if it works for you, go for it.

[bjl584]

I don't see a problem with it so long as you are able to manage multiple accounts. Things could get complicated if you don't stay on top of it.

[Jluke]

Be sure that your checking account has “overdraft “ protection (I.e. tied to your savings account) so that checks don’t bounce should you mess up.

If you don’t pay with paper checks and everything is electronic transfers then that probably isn’t necessary.

I have quite a few accounts but it works. Only one checking account though.

[Keshet]

Try out the mulyiple accts. and see how it goes. If you find it easier then managing one acct, use whichever system works better for you.

[myrdale]

I currently have a savings account to which my pay check is direct deposited and a checking account which I transfer money into once or twice a month to pay utilities and for my debt card.

I have been toying with the idea of opening a second account at a local credit union and keeping, say $5k in it and get a credit line through them. Honestly thought it just feels like an extra complication, which is why I haven't done it yet.

[james.hendrickson]

If you're going to open more accounts, it might make sense to call your bank and see if you can get a break on fees or some sort of incentive payment.

Basically, try to work the system.

[bjl584]

If you're going to open more accounts, it might make sense to call your bank and see if you can get a break on fees or some sort of incentive payment.

Basically, try to work the system.

I actually found it easier to have multiple accounts via different banks than to try to have them all at one bank.

My primary bank had too many rules regarding the management of the accounts. I could only make so many transfers per month, there had to be X amount of activity, etc.

It was way easier to set up an account at a different bank and link it electronically to my primary bank.

[disneysteve]

Do what works best for you.

What would I do? I would consolidate and simplify my finances as much as I could. The more accounts you have, the more time it takes to keep track of everything, balance statements, risk making mistakes, etc.

If it takes you 4 hours to balance your account now, it will take even longer when you have to do that multiple times for multiple accounts. I'd focus on figuring out why it takes so long. I'd say it probably takes me 15-20 minutes to balance my checkbook each month and I typically have between $10,000 and $20,000 worth of transactions each statement. It shouldn't be that difficult. If it is, figure out how to improve your record keeping so that it isn't such a burden.

[snafu]

Delighted to see you plan to return to debt reduction. Since CU don't charge fees, it seems reasonable to open another account. If it takes 4 hrs to manage the two accounts, I would guess adding a new account will add extra time since the existing saving and checking accounts will continue to require your attention. I suggest a print-out orasic b hand written 'chart' making it clear the net sum deposited, the sum for savings account #1, existing chequing account #2, new chequing account #3, that can be checked off each pay cycle.

[breathemusic]

I did this for quite some time, mainly just for convenience. What I ended up doing was having 1 checking account that all of my fixed amount bills pulled from, so phone, rent, insurance, etc. My paychecks have direct deposit so I set it up so that a set allottment from my paycheck when into that account every pay period and all I really did was check the account once a month or so to make sure that the figures were all still on track and nothing wonky had happened.

My main checking account was then where the rest (bulk) of my paycheck went, and that's where all of my variable expenses were paid from. So utilities, credit card bills (because I pay off my balance every month so there wasn't a set payment, though if you're trying to pay down debt and are throwing a fixed amount at a credit card this could go in the other account), and then just day to day spending.

Basically, for me it just made the snapshot of what my variable expenses looked like from month to month a bit cleaner.

I don't do it anymore, but only because i now live with my boyfriend and we have a joint account for shared expenses in addition to each having our own accounts for everything else... so 3 checking accounts would have been a pain in the butt and also the fixed expenses are almost all joint expenses now anyway.

[GrimJack]

I currently have a savings account to which my pay check is direct deposited and a checking account which I transfer money into once or twice a month to pay utilities and for my debt card.

I have been toying with the idea of opening a second account at a local credit union and keeping, say $5k in it and get a credit line through them. Honestly thought it just feels like an extra complication, which is why I haven't done it yet.

I tried that but I kept making too many transfers from savings to checking. I guess they limit transfers out of savings to make them different from checking accounts.

[GrimJack]

I have my main checking and savings in one CU and a special $150 sent to a checking account at another CU - every month there is an automatic transfer of $200 from the 2nd checking account to the savings account. I use the debit card from the 2nd account when I travel to limit losses (though, now that I think about it, I may have more money in the 2nd account now than the first since the 1st is used for all my bills??)