Bank Accounts: When More is More
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Photo: Daniel Y. Go
Everyone knows by now that long-term retirement planning is important, right? And you probably have some sort of budget or other system for planning daily, weekly, and monthly expenses.
Great. Glad to hear it. But what about those medium-term, medium-size expenses like vacation, car repair, furniture, and holiday spending? You know, the expenses that always seem to bite you in the ass?
Here’s my strategy: every time I get bitten, I open a new savings or checking account to collect money for a particular type of budget-busting expense. I’m now up to sixteen of them.
That’s just checking and savings accounts—it doesn’t include CDs or brokerage accounts. But bear with me, because I’m not insane: I really do have that many bank accounts, and it actually does make my life simpler.
In order to explain why I have so many accounts and why I think you should also have a bunch, let’s look into the past. (Cue dissolve and piano glissandos.)
The bad old days
I’m old enough, barely, to remember a time when most people had only two cash accounts: a checking account and a savings account. They were basically the same, except that the checking account let you transfer money to another person by writing on a little rectangular sheet of paper. This was so long ago that I can’t even remember what they called those things.
Schmecks, was it?
Back then, if you wanted to open a new account, you had to walk into the branch and sit down at a desk. If you wanted to set up an automatic monthly transfer between accounts—if your bank even offered such a service—you had to fill out paperwork. If you wanted to transfer money between accounts at different banks, you had to write yourself a schmeck or pay a wire fee. And if you had accounts at different banks and wanted to see them all at once in a single interface? Here, pal, take your free thermos and get out of my bank.
Yes, the good old days really sucked. Luckily, we don’t live there anymore, and we shouldn’t bank as if we do.
I have an emergency fund. A vacation account. A medical account. ...
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Categories: Uncategorized Tags: Bank Accounts, Banks, Brokerage Accounts, Car Repair, Checking Account, Desk, Holiday Spending, Interface, Monthly Expenses, Paperwork, Retirement Planning, Savings Account, Savings Accounts