Traditionally, most people have a savings account and don’t think about having other savings accounts. It’s about time to break out of the norm. Having multiple savings accounts can help you manage your money better. Not only that, your savings money will not just sit there collecting dust in the bank slowly growing, but having other savings accounts can make your money grow faster as well. Here are other essential savings accounts you should research and maybe put your hard earned money into.
Have a separate savings for crisis protection: Every month you should put some extra money down into this type of savings account just in case a medical crisis or some other unforseen unfortunate event happens where you will need funds quick. This should be one of your first savings account category because usually emergencies like these will happen at the most inconvenient times when you don’t have enough in your chequings to pay everything off. The money in here should only be touched for serious emergencies and not for frivolous spending. The money in here will be useful for when you get laid off work, are ill, or have a serious disability that impedes your ability to work. Try to at least have a few thousand dollars in here as a cushion for things that happen right away. You might want to save more in this category, of course, if you have a big family with children. If you have a family to look after, make sure there are sufficient emergency funds to last about three to six months or until you are able to get back on your feet and working again or find other options to help provide for your family.
Big year-to-year payouts: Taxes you pay for your home, land, and income usually have to be paid at the end of the year. When doing our monthly budgets, we usually forget these big yearly payouts and don’t include them in our monthly budget planning. It’s important to set aside money for these especially if self-employed so that we don’t spend all our money on other things and not have enough money to pay for taxes when taxes are due. Try to set aside at least a quarter of the income coming in to pay for taxes at the end of the tax year. If you oversave, that is a bonus for you. To help you file your taxes properly come tax time, contact Accountancy Services on the Sunshine Coast in Queensland.
Holiday spending: If you love to go all out when you celebrate holidays, it’s a good idea to have a savings account for holiday spending money and for gift or donation giving. Set aside maybe 25 dollars a week in this savings account for these expenses and at the end of a year you’ll have 1300 dollars in this account. That way, you won’t stress about coming up with money for the holidays that always come too fast each year.
Vacation money: It’s great to have money set aside for vacations when you find great flights or good deals on lodging at your dream destination. If you have money saved for vacations, your monthly budget will not be affected adversely by preventing you from taking money out of your regular expenses to pay for your vacations. You also won’t feel guilty on vacation when you know it’s not putting you in debt. If you set aside about 30 dollars each week in this savings section, you can have about 1560 dollars to spend for a vacation at the end of the year.
To save on fees, you can put all the money for these accounts in one savings account or two and have a file or spreadsheet on your computer keeping track of the breakdown of how the savings money should be separated. Whatever money comes in for the savings account, keep adding and distributing the money amounts accordingly on your spreadsheet as time goes by. It’s also wise to have some money set aside as float money to use to help balance out budget overspending.
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