The 6 Bank Accounts Everyone Needs

Managing your money doesn’t have to be complex – you can make it very very simple! The easiest way to do this is by splitting it up in different bank accounts.

Having multiple accounts which all have a unique purpose makes managing your money so much easier and streamline. Being able to log in to each account and automatically see exactly what you have without having to do any complex mental maths is so helpful!

I do want to caveat that personal finance should be just that, personal! Having multiple different accounts is the system that works for me and I believe will work for other people, but it won’t work for everyone. You may already know, without reading the rest of this post, that having multiple accounts wouldn’t work for you. But it may be something you can take inspiration from and make your own.

So what are the six accounts for exactly? 

The one you get paid into

A central account if you may. The one where money gets paid into and then transferred out to other accounts. Managing your money this way will ensure that you are giving your money a purpose and taking control over it. 

Having one central account is also great if you intend to follow the Zero-Based Budgeting method – as it will ensure you are assigning every single penny a role. 

The one for life

Bills, subscriptions, day-to-day spending, all that jazz – set up an account just for this purpose! On pay-day transfer over the amount you need and hey presto you’ve just budgeted! 

Want to be even more organised? Make these two separate accounts – one for bills and one for day-to-day! Or want to get more out of your money, start putting your expenses on credit cards to gain points and then pay it off every single month (please please please only start credit card hacking if you know you are not in danger of using them irresponsibly!!). 

The one for emergencies

It is imperative that you separate your emergency fund from your current accounts! Keeping it in its own separate account ensures that it won’t accidentally be spent – it also provides another barrier to purposefully spending it. Plus, I find it more mentally comforting knowing that account is there for when I need it. 

The one for big expenses

By big expenses I am referring to sinking funds – the valuable budgeting tool that means you save for big expenses over a longer time period and cash flow when the time comes. Fintech bank accounts like Monzo and Starling are perfect for this purpose as you can make pots/spaces for each sinking fund you need.  

The one where your money works for you

You work hard for your money, the least it can do is work for you in return! So, what do I mean by work for you? I mean investing!

Interest rates are still pitifully low, meaning investing is still one of the only ways to ensure your money will outpace inflation. With recession rumours swirling, it may seem counterproductive to start your investing journey now. However, the time and tested saying still rings true – it is not about timing the market, it is about time in the market. And as the saying goes, yesterday was the best day to start investing, today is the second best!

The one for when you leave the workforce

Aka. your retirement fund! This could be a workplace pension, a private pension, a S&S LISA or something similar. You are never too young to start planning for your retirement and putting that plan into motion. Actually, the younger you start the more time you have to take advance of compound interest – but that being said it is also never too late to start! 

There you have it, the six accounts everyone should have!

Do you have multiple accounts? I’d love to hear how you split your money up!