Is there an exact number of accounts a family should have?
As much as I would like to answer with a ”No”, I am going to have to say ”Yes”.
Yes, every family needs multiple bank accounts. Easy to save, easy to maintain, easy to keep organised, and easy to know where and what is happening.
You probably think you need to have a lot of money for multiple bank accounts, but that is not true.
Why do we need our money to be organised?
At the beginning, it may seem pointless, and you may question why you need to organise your money.
Imagine if we lived in an unorganised house. For example, if you had no allocated bedroom, no allocated kitchen, and everything was everywhere.
Now, think about whether you can live like that, in chaos.
Imagine your money sitting in one account and not being organised. It is all in one place; you have no idea how much you have saved because you don’t know how much your bills are.
Or even if you know how much your bills are, you don’t know how much you have for house maintenance in case of an emergency.
Let’s organise it.
Multiple bank accounts will help you stay organised. Little by little, every month you will be able to save money for different things. This will give you peace of mind knowing that you have saved for emergencies, holidays, or any other purpose you may have in mind.
That will be the purpose of your multiple bank accounts: to keep your mindset healthy and happy.
But why do we need 5 bank accounts?
There are some really good reasons to have this many bank accounts.
One of the reasons we have 5 bank accounts is protection. We know that we have saved enough in each account, and in case one of the accounts runs out of money, we still have money in the other accounts, and we are not completely out of money.
The accounts
Here I will tell you exactly how many accounts we have and how we budget with them.
My husband and I have a joint account.
One account two cards.
For us, it is super important to have our money combined because we both feel equal.
We don’t end up on minus in our accounts (if they were separate), and none of us feels like we don’t earn enough for the family. Everything goes into one account and then gets separated.
There, we receive our monthly salaries, and from there our monthly bills and groceries are paid. It works perfectly for us, also for our mortgage payment. We have a reduced rate on the mortgage for having a joint account.
The downside of the joint account is that the internet banking is shared, and we can both see every spending we do. There are no surprises for birthdays or any other occasion because we can see everything.
For that reason, we have decided to create a current account for each of us.
So here come the current accounts.
Now this is something new for both of us, and we are using them just for ourselves. We have opened a current account each with separate cards, and this will be more like our own “treat account.”
We are adding £10 a week into each account, and we can spend the money on what we want—impulsive buys, saving for birthdays, or just keeping the money for something big we want.
There will be no looking into each account and no questioning about where you spent your money.
Joint Savings account
We both have a joint savings account. This is also very important for families.
We try to save 20% of our monthly salaries (see my 50-30-20 saving tip), and we both feel that we contribute to it. Also, in case of misunderstanding or split, we are both allowed to have half of the savings.
Having a joint savings account also allows each of us to feel that we have both contributed to it. Normally, in every family, the wife earns less or almost nothing (especially when on maternity) and saving will be near impossible if we were to have two separate accounts.
Emergency account
This account gets £50 per month, and the money is used for house maintenance, car repair or any other emergency expenses. For example, our yearly boiler check, painting and decorating around the house, or any other repair that needs doing in the house, is paid from there.
If we have any unexpected car repairs or service coming up, this also gets paid from there.
Kids accounts
We have two children, and each of them have their own savings accounts.
We are receiving child benefit for them, which is around £170 a month. Our eldest gets £100 and our youngest £70. They get this money fortnightly, and with a standing order, it goes straight into their savings accounts.
The plan is that when they are old enough, and we know they are capable of taking good decisions, they will get the money saved for them and they can use it on whatever they like. Driving licence, car or even towards a house deposit.
We are saving their child benefits since they were babies, so hopefully, this will be a good help for them once they are adults.