It takes time to build up a substantial amount of money, whether it’s to save for the future or to go on a nice, well-deserved holiday. But when you don’t know how to save properly, it can be difficult to find the motivation to keep transferring over funds.

Before launching into any savings goals, first build a strong foundation. Pay off any short-term debt such as credit cards,

When it comes to your personal bank account, simplicity rules. Multiple savings are different for single 20-something recently out of college and new to the workforce; a married couple in their 40s with two kids at home; and a retiree couple enjoying life in their 60s.

Before opening a savings account, you need to think about how many accounts you’re realistically going to need. If you don’t think you’ll be needing more than a couple of accounts – don’t open them, as it may make you feel less motivated to save if you’re constantly staring at an empty account.

When I set up multiple savings account I could easily see how much money I mark for certain expenses and how much I already save toward my goals.  I currently have five separate savings accounts and it’s changed everything. It gives me a sense of security, knowing that if worse comes to worse and I have to take money from one savings account, I still have others to rely on without leaving myself in a struggle.

Just to give you an idea of the beauty of this system, here are a scenario of multiple accounts for a single to married  between 20 – 40 something.

# 1 – Essential Account  

This account is to pay routine expenses (based on your monthly budgeting). Just make sure you pick the best bank to work with (many ATMs outlet, free admin charge etc.)

# 2 –  Emergency Fund

This money is purely meant for true emergencies. You can save your money in a bank with higher interest rates. You should never touch this account. Make sure to set up automatic withdrawal to this account based on your budget.

# 3 – Long-term/Short-term Goals Accounts  

What are your financial goals? annual holiday, wedding plan, KPR (house) down payment, house renovation, car down payment, university/college tuition etc.  Each person has a different goal they are saving towards.

These accounts are for your specific financial goals. You can open 1 or 2 savings account to cover all your financial goals and make separate tracking sheets for each financial goal. Your financial goals will not be same when you are married. You can set up a specific income source automatically deposited into this account each month so that you are saving no matter what.

# 4 – Fun & Happy Account

This savings account was meant to be purely “fun” money. Think of this as your spare change jar.  At the end of the month your debt bills are paid, your 20% has gone into savings, all accounts are accounted for, and you still have extra!

You can use it for your hobby and other personal interest which seems to be one of the only non-essential expenses that you don’t feel guilty spending on. Once your debt is paid off, and your savings is under control, this account is your reward for spending wisely.

# 5 – Retirement Account

Lastly, is a savings account for your retirement; mutual funds, pension annuities or other retirement investment. Again, you can set up automatic withdrawal based on your monthly budgeting. You will not even notice that small missing amount that can turn into a large amount by over the years. It will help you be prepared to meet your future retirement lifestyle dreams if you start saving early and often.

How do you manage personal bank accounts? Do you have multiple savings accounts?