Not long ago, I had one savings account that was my emergency fund/travel fund/everything else fund all at one time. How wrong I was!
Multiple savings accounts allow you to track your progress and define your goals. See my progress on multiple savings goals (as seen in the “Goals” area of Mint) below:
As you can see, Mint shows where you’re behind in red and let me tell you- this pressure works! Each of these categories is a separate savings account (“real estate” is an Acorns investment account).
An added pressure point is the fact that each of these accounts has a minimum of $100, so willy nilly spending or transfers can have costly consequences.
If all of these goals were combined in a single savings account, the end goal amount would be unclear and therefore uninspiring. Also, when I’m in a pinch now and have to transfer some money from savings to my checking account (which I try not to do very often), I can think about which goal I can wait a little longer for.
Do you have multiple savings accounts? Why or why not?