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Many people only have one savings account to manage their finances. I recommend having different types. Here are five savings accounts that I have.

Part of budgeting is saving for the future. You know that you need to save some of your paycheck, and a lot of people will have one fund that is used for all their savings needs.

I recommend having multiple savings accounts. When I’ve mentioned this to people before or when someone at my bank sees my accounts, they question things. Why do I need my money split across different accounts? That’s not making interest rates work.

Well, to be honest, I don’t keep a lot of money in cash savings accounts. I like to utilize investments to make the most of my money, especially when it comes to my retirement fund. However, I have multiple accounts to keep track of what my money is being saved for.

My retirement fund is a must

The one savings account that I put as a high priority is my retirement fund*. Being self-employed, I don’t have a work pension to fall back on, and the state pension is not going to be enough to live on. So, I need to make sure I have enough money to cover my future.

This is in an investment account. Right now, I do have it set as a slightly higher risk than a couple of my other investment accounts because I have a longer period of time to save up and be ready for the future.

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Emergency savings accounts are another must

You need to have an emergency fund. This is another account that I make as a must, and this one is in a cash savings account. I need that money on hand when I need it. After all, you never know what is going to happen.

I try to keep this account at around three months of my living expenses. Due to changes to Google search results, my income took a hit at the end of 2023 and I did have to dip into it. That’s why I have it! Now I’m working on building it back up again.

A sinking funds account for the unexpected payments

Actually, I also have my sinking funds for the expected extra payments, too. Just recently, I needed to get an oil change and my tires changed over. The mechanic found my back brakes needed replacing. So, my sinking fun was a life-saver for this.

This is a small amount that helps to cover those unexpected payments now and then. Maybe it’s a car breakdown or a boiler issue. Whatever it is, you have it instead of dipping into your emergency fund.

Vacation savings accounts are good to have

Now it comes to the less important savings accounts*. I like to have a vacation account. I also have a separate Christmas account, so technically, I have a bonus account. While I love to go on vacations, I don’t want to be in debt because of them. So, the accounts are there to help balance things.

These accounts don’t currently have a lot in them. They’re good to have, but if I can’t afford life and the more important savings accounts, then I’m not going to put money into the vacation ones.

Furniture funds are worth considering

Another account that I have but don’t always use is a furniture fund. When my ex first moved out, I had a lot of things to replace—both because he took items and because I wanted to remove traces of him from my home. This led to me realizing that I needed to space out the purchases that I made, especially for some of the bigger items.

So, I looked at saving up for items that I wanted. This fund is like my vacation one, though. I only put the spare money in when I have it. If my income is lower one month, then this is the first account that I don’t put anything in. I also usually have something specific that I’m saving up for. Right now, it’s replacement shelves for my office.

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Which savings accounts do you have for your budget? Share in the comments below.