One of the best things I’ve done to organize my finances and to make sure we only spend within our budget, is to open a number of different accounts. We did this for our spending accounts – we have separate accounts for diesel and groceries and bills – and we’ve also done this for our savings. It definitely pays to have several savings accounts.
Before I set up this system, I didn’t really have any savings. Sometimes I would be able to save a little bit from paycheck to paycheck, but that would soon be gone the first time I wanted to buy something extra. For me, regular saving with several savings accounts was the only way to do it.
How many savings accounts do you need?
In The Organised Life Project, I encourage people to open at least 3 savings accounts. One for long-term savings, one for medium term savings and one for short-term ‘emergency’ savings.
The short-term ‘emergency’ savings is the one you should save into first. Ideally, it would contain a month’s worth of outgoings. This is the account you use when there’s some unexpected spending needed: the washing machine has broken or the car needs new tyres. For this, you need an account which you can access the savings immediately. This typically has a lower interest rate (around 1%) and is an easy-access account.
For medium-term savings, for example, if you’re saving for a holiday or Christmas, it’s worth looking at regular saver accounts. Some of these can pay up to 5% interest which is amazing in the current climate. You do have to pay into it monthly, and they have restrictions on when you can withdraw money. Most of them require you to have the linked bank account. Typically, these accounts only last a year, so they are perfect for saving for a special occasion.
For longer-term saving, you definitely need to look at a fixed-rate account, where you need to give notice to withdraw the money. You might also look at bonds or ISAs, depending on your situation and how much you want to save. On these accounts, the interest rate is around 2%, but you don’t need to keep chopping and changing them like you do with the regular saving accounts. Your money stays safe earning a steady rate of interest. And with interest rates rising, that can only be a good thing.
Regular saving is key
Whichever bank accounts you choose, regular saving is so important. I know personally, that if the money is in my ‘spending’ account, I’ll spend it. I think I’m a spender, not a saver! But if it’s tucked safely away into a savings account, it soon adds up. Even £30 a month adds up when you don’t spend it.
For me, it definitely pays to have several savings accounts. It helps me stay organised with my savings and keep on top of my goals. Ultimately, it helps me control my money, which is the most important thing.
Finances are a big part of The Organised Life Project. If you’d like to join The Organised Life Project, which is a systematic way of organizing your entire life, please head over to and sign up to join our community.