Why You Need At Least 4 Bank Accounts - The Little Frugal House

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Wondering how to make budgeting easier and organize your money? In this post, I’ll show you why you need at least 4 bank accounts to save money and be smart with your money.

Are you a dreamer like me? Do you dream of becoming financially stable, independent, and to quit worrying and stressing about money?

Do you want to purchase big things in the future? Or do you want to increase your savings? And make sure your bills are always taken care of with no worry or stress?

I am a strong believer that money does not equal happiness, but it can definitely be used in great ways to provide a more comfortable life for your family. And it can do powerful things when put to good use.

A great way to get to financial stability is by using the 4 bank account system.

The 4 Bank Accounts You Need

These 4 bank accounts will help you organize your money, making budgeting so simple and easy. You can divide your money up, telling it exactly where to go and what it will be used for.

This makes it so easy to make sure bills get paid, you save some money, and you will know exactly how much spending money you have.

These are the 4 bank accounts you need to have set up:

1. Bill Pay Checking Account

Add up all your bills over the course of a year – everything from electric bills, property taxes, homeowner’s insurance, mortgage, cell phone bills…

Add everything up and add a little extra for wiggle room, then divide by 12. This is the amount you need to be transferring to your bill pay checking account each month.

You can break it down into a weekly transfer, bi-weekly transfer, or once a month – just make sure the whole amount gets put in there.

And then when it comes time for all those bills to be paid, the money is right there and ready to be used for that exact purpose.

I would also highly suggest setting your bills up on auto pay and having them draft directly from this account. Of course, you still want to keep up with the bills and make sure you are being charged correctly, but this will make sure every bill gets paid on time and you don’t accrue late fees.

2. Regular Checking Account

This account is for everything else – unless you want to take this system a step farther and create additional accounts for things like groceries or hobbies.

Separating bills from everything else will give you an easy, in-your-face, image of how much money you actually have for everything else after bills are paid. And bills get paid first. Isn’t life grand? 😉

3. Savings for the Future Account

This is a savings account for emergencies or just savings for the future.

Once you figure your bills and how much you will need for groceries, gas, misc spending, etc., decide on an amount you can transfer each week or monthly to this account. You can even set up auto transfers on your online banking so you never forget!

This money should not be touched unless it’s an emergency (like a real emergency!)

4. Savings to Spend Account

If you have a large purchase you are wanting to make, start saving in this account for that. Think of this money as I’m saving to spend this on this one really big thing, like a new car, four wheeler, or a big home improvement project.

This account is you working hard to reach your goals, and not depending on loans for things you want.

Additional Account Ideas:

Depending on your specific dreams and desires, you could also create an account for home improvement projects, hobbies, a separate business account, etc.

The idea is to make your money work for you, to tell it where to go. From my experience, if the money sits in one account, it’s going to be spent.

And at the end of the day, I probably wouldn’t be able to tell you where it went. I don’t like that! I like to know my money went here for this, and I saved and got this.

Take a look at your bank accounts and see how you can change things up to make this system work for you. Talk to your local bank branch or check online to open these bank accounts to organize your money.

Everyone is different and has a different money situation, but everyone is capable of doing their very best and making their money work for them.

Try setting up these 4 bank accounts to organize your money and tell it where to go!

Using this system will allow you to feel the relief of knowing you always have money for your bills, you can increase your savings, and save up for large purchases. This has seriously been life changing for us and I can’t wait to hear how it helps you reach your financial dreams and goals.

Go chase your dreams! Keep at this and never give up on yourself. You can do this!