As you work to organize and better manage your finances, you will find that you start having multiple financial goals at the same time. It can be overwhelming to juggle at first, but you must get used to it sooner rather than later.
Whether it be saving for a home down payment, building an emergency fund, or setting money aside for an upcoming vacation, keeping track of your financial goals can become complicated if not done right. The best way to reach your financial goals is to set up multiple savings accounts. This way, you can separate your money accordingly and track your progress on each goal.
Your Best Option For Multiple Savings Accounts
I use Capital One 360 for my savings accounts. Capital One 360 is an online-only bank that offers a competitive interest rate compared to the national average which is only a sorry 0.06%.
There are no account maintenance fees and no minimum balance requirement plus, you can open up to 25 different online savings accounts. I currently have 1 online checking account and 11 online savings accounts with Capital One 360.
Their interest rate on savings account has been at a solid 0.75% for the past few years which is good but recently, now it is being increased to 1.00%.
I nicknamed all my online savings accounts so I could better tell them apart. Some of my accounts include:
Emergency fund – It’s no surprise that this account holds all my savings for unexpected or emergency expenses. My goal is to keep about 3-6 months of living expenses in this account.
Christmas – This is where I keep all my savings for the holiday season. I try to start funding this account as early as possible so I can have a debt free Christmas each year.
Business Taxes – As a freelancer and online business owner, I have to set aside a portion of my income to pay taxes each quarter. The money in this account is off limits for any other purpose.
Insurance – Luckily, I’m covered under my husband’s health insurance plan through his employer but I like to save up for my 6-month auto insurance premiums in this account.
Travel – I like to take a trip at least once or twice a year saving for this in advance helps me to so without running up a balance on my credit cards.
Pet Emergency Fund – Yes, I chose to have a separate emergency fund for my cat. She is apart of the family but I wanted to keep her savings separate from the family savings so I can use them accordingly if she ever gets sick and needs to go to the vet. I only have $150 in this account so far, but I hope to get it to $500 especially as my cat gets older and may need more medical care.
These are just a few of my account but as you can see, separating them helps me stay organized and know exactly what I’m saving for. Also, when it comes time to spend the money, I don’t feel guilty when using it for a designated purchase. I fear if I just had one big savings account, I would have a hard time deciding whether or not to use the funds for certain expenses.
For example, you probably wouldn’t want to withdraw money from your emergency fund to pay for a vacation which is why it’s best to keep those two savings goals separate.
Plus, earning 1.00% interest on EACH account whether it’s for a short-term or long-term savings goal is pretty nice.
Manage Your Savings Goals
Another feature I like about Capital One 360 is that they have a “My Savings Goals” tool that enables you to track your saving journey. Setting up savings goals is simple:
- Select the savings account for which you would like to set a goal
- Select a Goal Type (the options are: Baby, Car, Education, Emergency/Rainy Day, Fun Fund, Gifts/Holiday, Home Improvement, House, Taxes/Insurance, Vacation, Wedding, and Other)
- Give your goal a name (optional)
- Set your target goal amount
The My Savings Goals tool provides you with two calculations:
Amount – enter a start and end date, the tool will show you how much you need to save monthly to meet your goal
End Date – enter how much you plan to save monthly, the tool will show you when you’ll reach your goal by
Automatic Savings Plan
One of Capital One 360’s perks is that you don’t have to ditch your current bank in order to bank with Capital One 360. I still have my accounts at my traditional bank.
To transfer money to my Capital One 360 savings accounts each month, I use the Automatic Savings Plan tool.
You simply select which external account you’d like the money to be transferred from and which Capital One 360 savings account you’d like it to go to. Then, enter an amount and set a frequency. The options are Weekly, Every Other Week, Twice a Month, Monthly, and Quarterly.
You can also transfer manually which is what I choose to do sometimes. I like this tool because it provides me with the best of both worlds: I get to keep my traditional checking account for easy access to short-term cash and I get to keep multiples savings account in an online account that earns interest each month.
Give It a Try
Having multiple savings accounts is the BEST way to reach your financial goals. It lets you separate your money so that you can visually see the different things you want to accomplish with your money. Capital One 360 makes it easy to use multiple savings accounts to reach your financial goals.
With Capital One 360, you can create up to 25 different savings accounts. This online bank offers a goal tracking tool and automatic transfers to make it even easier to stay on track. Have financial goals you’re eager to reach this year? I recommend you give it a try!
The post How to Reach Your Financial Goals With Multiple Savings Accounts appeared first on Single Moms Income.