Keep your 2023 budget simple! With multi-account budgeting, allocate money from your paycheck regularly to multiple Checking and/or Savings Accounts and leave excessive technology or ongoing expense tracking in the past. Check out these three multi-account budgeting methods to consider in the new year and avoid account maintenance fees with a Free Choice Checking Account from Mechanics Cooperative Bank!


Fixed vs. Variable Expense Accounts

This strategy entails creating two Checking Accounts and one emergency Savings Account, but additional savings accounts can be added for specific goals. The first checking account should be set aside for fixed expenses that don’t change each month, such as rent or mortgage payments, utilities, insurance, minimum or fixed debt payments, and so on. Next, the second checking account should be used for expenses that vary from month to month, such as groceries, dining out, clothing, entertainment, and more. Lastly, the emergency savings account should be linked to the two checking accounts so you can quickly transfer money to and from there. You’ll want to split your paycheck into these three accounts each pay period. Overall, the goal of this budgeting method is to get a better overview of overall spending and limit any variable spending, where possible, by transferring less money into that account.


Multiple Savings Accounts for Different Goals

Another notable multi-account strategy is setting aside multiple Savings Accounts for different goals, using a single Checking Account to pay bills. This will allow you to transfer money out of a sole checking account, each into separate savings accounts, to help divide up income before it can be spent. To maintain multiple accounts, a Savings Account with little to no fees is most recommended for any short-term savings goal, whereas long-term goals are better suited with a Money Market Account that generates a higher interest rate. Emergency savings, vacations, down payments, and home repairs are among the most recommended savings goals to create accounts for and contribute to monthly or every few months.


Separate & Joint Accounts with A Spouse

For those who are married or in a committed partnership, you may already have or be considering using multiple bank accounts to share finances. In the case of using this situation as a multi-account budget, each partner may have their own Checking and Savings Accounts, plus a joint version of each for joint bills and shared savings goals. This many accounts can be overwhelming for some but setting up automatic transfers is the key to clarity. Setting up transfers from each partner’s personal checking into their personal savings account in addition to the set of shared accounts, saving for personal goals, and staying on track for the future together becomes automated.

Simplify your finances in the new year with Multi-Account Budgeting! Your family, your budget—and your wallet—will thank you in the long run! Contact us today to get started by opening the accounts that work best for your needs.