Why I Have 6 Bank Accounts – And You Should Too!

why I have 6 bank accounts and you should too!

You read that right, I have six bank accounts that I use on a monthly basis. I have had more in the past and the number of accounts fluctuates depending on what is going on in my life. Keep reading to see why I have six bank accounts and why you may even need more!

Add Structure To Your Financial Plan

It is extremely important we have a structure built for our personal finances in order to be successful with them. I went years with having two bank accounts. One checking account and one savings account. Money was directly deposited into my checking and I paid for all my bills out of there. If there was any money left at the end of the month, I might move some of it to my savings account.

Needless to say, when I managed my finances this way I was going nowhere fast. I wasn’t saving really anything and I spent what I made. As long as there wasn’t a negative balance in my checking account at the end of the month, I was happy.

It turns out, most people manage their finances this way. I was normal and didn’t know any better. Now that I’m older and (hopefully) wiser, I now use a minimum of six bank accounts – and sometimes more!

Before I go into the “why”, let me show you how my current bank account system is set up.

My Current Bank Account Setup:

you should have multiple bank accounts
My first account is my checking account. After all my pretax money is taken out of my check for retirement, health insurance, and my health savings account, the money is directly deposited into my checking account.

At the beginning of the month, my wife moves money around into each separate savings account. By moving the money at the beginning, it forces us to stick to our budget for the remainder of the month, which isn’t hard if you incorporate a simple monthly budget template into your financial planning.

free budget printable

Move Your Money At The Beginning Of The Month

Most people manage their money in a backward manner. At the end of the month is when money is moved. Whatever is left in the checking account is then dispersed into any liabilities or savings. The problem with this method is it is too easy to overspend. Just like when I was younger, I usually spent what I made because the money was easy and accessible.

If you move your money at the beginning, it makes it much more difficult to overspend if you don’t have the money in checking to begin with. This is where strict discipline on credit card usage is a must. Credit cards make it too easy to spend when you run out of money.

This is why I recommend using cash throughout the month if you have issues with credit cards. Leave the cards at home when you go to the grocery store or shop online: How Frys Pickup (formally Click List) Saves Me Money

You Need A Vehicle Account

you need a vehicle account
After the money is deposited into checking, we move a portion into a vehicle fund. This fund is only for vehicle maintenance and for future vehicle purchases. I am anti-car payments so we save up and buy our cars with cash. Due to my wife and I driving older vehicles (1 is 12 years old, the other is 13 years old), they periodically need repairs that can be a few hundred dollars. By contributing to this account each month, we have never needed to put a vehicle repair on a credit card.

My Vacation Account Is My Favorite

The third savings account is our vacation fund. This is obviously our favorite fund and one we make sure we put money into each and every month! By having a set amount of money deposited into this savings account, we pay for our vacations with cash.

By doing it this way, we can enjoy our vacation and not feel the pain of credit card debt when we come home from vacation. We love our vacations so we make sure it is one of our top priorities to fund this savings account.

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Emergency Savings And 6 Months Of Expenses Account

emergency savings 6 months of expenses account
Our fourth savings account is our emergency savings and six months of expenses fund. Luckily this savings account is fully funded so we no longer contribute to it. It sits there making little to no money in interest.

I’m all about investing money and it hurts to know that this account is worth 2%-3% less each year due to inflation. However, this is a savings account and not an investment. It is there to protect us against emergencies or unexpected major expenses. Insurance for life is a good way to think about it. Insurance costs you money – investments make you money. This savings account is my insurance.

“Fun Money” Accounts Are Only For Fun!

The fifth and sixth savings accounts are also two of our favorites. Each month my wife and I get a certain amount of “fun money.” This is money that we can spend without feeling any guilt. If I want to use my money to go get beer and wings with my friends I can. If she wants to spend it on her hair and nails, she can with no questions asked.

We each need a certain amount of money to spend without feeling guilty. If you are in debt, you know how frustrating it can be to stick to a budget without any room for fun. It’s like a diet. If you have no cheat days, how many people are really going to stick to a diet for any amount of time? Give yourself some wiggle room to splurge a predetermined and budgeted amount on yourself. Even if it’s only $20 dollars a month!

Right now we are at the lowest number of accounts we have had in our marriage. Depending on what our goals are, we may have more accounts depending on what we are saving up for. This structure actually works very well and is not confusing once you get the hang of it. We have built up a routine of moving money on a monthly basis in order to set ourselves up for future success.

Increase Your Income To Fund Your Accounts Quicker

I also rely heavily on my side hustle. I work a side job outside of my main employment to add more money to our goals. By doing this, we are able to fund our separate accounts faster. All of my side job money goes to the extra accounts and none of it is used for bills. If you get into the habit of overspending and using a side hustle to pay the bills, you are one injury away from defaulting on your loans. Avoid this slippery slope!

If you are in debt, your account structure may look a bit different. Here is an example of how your account and payment structure may look:
financial structure while in debt
You may be wondering where the vacation fund went. Depending on the amount of debt you have and your future plans, you may need to go without a vacation for a year or two. Before you unsubscribe from all my emails and close my web page, hear me out.

If you continue to spend money on vacations or other things that delay your debt payoff, you may never truly free yourself from debt. If you sacrifice a couple of years now to get out of debt, you will be able to take many more exciting and financially stress-free vacations in the future. Avoid punishing your future self by spending money you don’t have today.

If you need more help getting out of debt, please check out my related articles:

My friends, I truly value you and appreciate you learning about personal finance alongside with me. I want nothing more than for you to truly experience the freedom that comes with being debt free. I just need you to convince yourself that being debt free is actually possible. If you can convince yourself that it is actually possible, the sky is the limit!

Let me know if there is anything I can do for you or if you have any questions. How many bank accounts do you have? Do you have more or less than me? Let me know in the comments, I would love to hear what system does or doesn’t work for you!

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About The Author

Ryan Luke

Ryan Luke is a father of three, a husband, a financial coach, and a full-time police officer. He has been featured on MarketWatch, Forbes, Fox Business, Experian, MSN, and USA Today. He focuses on providing easy to understand personal finance information to first responders so they can get out of debt and build wealth on a public servant salary.

9 thoughts on “Why I Have 6 Bank Accounts – And You Should Too!”

  1. Do you use one bank and open multiple account and savings at a separate bank? Or do you have some accounts at an online bank like Ally?
    I currently have a savings and money market at one bank and a checking at another. I need to consider your idea of multiple accounts for emergency fund, vacation etc.

    1. Hey Claudia, we use USAA for two of the accounts and a credit union for the others. Two banks with separate accounts within that we use to transfer money online in between them. I have heard good things about online banks as well, but make sure if you use one it is FDIC insured.

  2. Hi, Ryan!
    First of all regular banks are terrible to use for anybody. They charge too many fees! In my personal experience credit unions are far superior; no fees of any kind. As long as my account is positive and I have only $1.00; no problem.

    Second the Bank On Yourself method is the way I will be setting myself up for success. @PamelaYellen or @BankOnYourself helps a person to have multiple accounts and earn at least 6% or more every year. You can add money to your accounts borrowing money but while you are borrowing money; you keep earning interest even though the money is not there. Yes, I plan to have one account for my living revocable trust, one for buying cars, one for vacations, one for emergencies equal to minimum of at least 2 years of income, one for extra money for medical emergencies, one for my future wife, one for house improvements and emergencies, one for saving money to fund any musical purchases in case I need to upgrade equipment, one account exclusively for giving money to my church and other non profit ministries and the list goes on.

    Really check out Pamela Yellen’s 2 books on Bank On Yourself and try to keep an open mind about them. For me stocks, bonds, ETF’s and mutual funds are all not only a gamble but a big lie I will not fall into. Do some resesrch at Pamela’s Bank On Yourself website and even 401(k)’s and other vehicles like them are purely a waste of money. I have personally studied her website and I am convinced this is where I will put my money.

    By the way, I will be receiving streams of income by the process of sowing and reaping which is found in Genesis and other places in the Bible. And yes I will be writing a book about my adventures and giving facts about what I did. I am kind of like Warren Buffett because I don’t go along with the herd! Please have a blessed day and week! God bless!

    1. Hey David, thanks for taking the time to write this in-depth comment! I totally agree with you about banks. We also avoid the traditional banks and use a credit union as well as USAA for our accounts. The fees and incredibly small interest rates given are a major downside of traditional banks such as WellsFargo or Bank Of America.

      I will definitely check out Pamela Yellen’s 2 books on Bank On Yourself. Thanks for the recommendation! As far as investing in the stock market, it’s not as bad as you may think. As long as you pay attention to fee structures and don’t try to “beat the market” you can actually make quite a bit of money. I have more than doubled my retirement account that I have been investing in for the past 15 years. Even with a recession, if you invest in the market, over time you will average out about 8% a year.

      When you write your book, let me know. I would love to read it!

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