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Agree to disagree

I was asking Girl Ninja
what I should blog about tonight (she is often the source of inspiration of my posts) and we began talking about dedicated savings account. We ended the conversation agreeing to disagree. She likes the idea of multiple dedicated savings accounts and I hate it. We debated for about 2 minutes about this before she began beating me profusely and yelling “Girl Ninja runs this show!!!!”

….Yeah, that’s exactly what happened 🙂

Here’s my opinion:

Multiple savings accounts, while probably a good idea for most, seem totally inefficient to me. I love keeping all our money in one main account and watching that sucker grow as much as possible each month. It promotes intense focus and allows us the ability to achieve our BIG goals faster. As you know, we are working towards a $100,000 down payment goal. By putting all of our discretionary savings in to one account, we will be able to reach that down payment goal pretty quick. If we were splitting our savings amongst a dedicated house fund, vacation fund, new car fund, furniture fund, etc, I would feel like we were barely making progress. Essentially I like to check one goal of the list before moving on to the next one.

Girl Ninja’s opinion:

My hotty with a naughty body, however, thinks dedicated savings account are pretty darn terrific. For her, it supports guilt free spending. If the travel fund has $2,000 in it, and an opportunity to go to on a sweet vacation cones our way, we book the trip no questions asked. Instead of picking one thing and focusing on it, she’d rather make a list of all our goals and work towards accomplishing all of them at the same time.

Since this is MY blog, and not hers, I declare myself the winner of this argument!

Booya for winning. Haha, kidding. I imagine most of you probably set savings goals for a whole bunch of things, but hopefully there are at least a few of you that side with me. Anyone, anyone? Bueller…Bueller?

How many separate DEDICATED savings account do you have and what are they for?

If you only have one primary savings account, do you ever feel guilty taking from it to do other things like go on vacation, etc?

If you have multiple savings accounts, do you ever get frustrated that you aren’t able to check goals of the list as quickly?




  1. I agree with you. It makes me feel better to see all of my money in one place. I suppose I can understand where GN is coming from, but I still agree with you.

  2. We have separate dedicated savings accounts (gotta love ING for that! I’m really hoping things don’t change!) I’m with Girl Ninja on this one – it’s nice to save for multiple things at once, and then not feel bad when you have reached your goal and it’s time to empty the account. If I had one large account, I would probably feel bad about taking money out of it, even if I knew I had a certain percentage of it set aside for a specific purpose.

    Currently, I have savings accounts for:
    * Emergency Fund (self explanatory)
    * Car and motorcycle maintenance (my husband’s Harley needs an oil change about 3 times a year – at $350 a pop, I like to know the money is ready when we need it!)
    * Dog Medicine (so I don’t have a heart attacke when I have to shell out $250 twice a year for their flea and heartworm meds)
    * College books (my husband gets a yearly stipend from the VA to pay for his school books, so we set it aside and just draw from this account each semester)
    * December 2011 Cruise (going on a cruise for Christmas! Already halfway to my savings goal!)
    * Vacation fund (this is for random roap trips and for when we want to go see family)
    * House repairs (We want to make some upgrades to our house, and buy a new bedroom furniture set, so money is set aside here for whenever we are ready to do so)

    The separate accounts don’t bother me, because my total balance for all accounts still shows up at the very bottom, so I can still tell how much total cash we have on hand in our savings accounts.

  3. I just have a high interest online savings account (for emergencies and whatnot) and a regular savings account (for bills and unexpected expenses). I’ve thought about opening a third account to save for my future wedding, vacations, etc, but I won’t do it until I’m done paying off all debt (including the 0% loan from my parents).

    I like to be as organized as possible, but right now I just use Excel to tell me which dollars in each account are set aside for which purpose.

  4. I am on the fence with this one. On one hand, it is nice to have the splruge money aside so that you priorities don’t always take over that vacation. It’s easy to say this $1000 is great for extra principle payment on the mortgage instead of a vacation, because I am being responsible. But after 3 years of no vacation, that $1000 ear mark for a vaca sound mighty good.

    One the other hand, it is nice to watch the pile grow and less piles to keep track of. Plus some banks will give tiered interest rates. If you have 2 accounts with $8000 in one and $2000 in the other, they both only get tier 1 interest instead of teir 2 which is 0.25% more but has a $10k minimum.

    My solution is to keep the dedicated funds separate only on my speadsheet. See my post: This way, I would keep track of my slpruge funds, but I have all my money in two piles, a smaller one in checking so I am pay my bills, and a bigger on in savings for higher interest.

  5. I’m on the multiple accounts team. I have the following savings accounts:

    – Emergency Savings
    – Ad Valorem Car Tax Savings
    – Vacation Savings
    – Wish List Purchase Savings

    I nearly died last year when I got the notice to pay my ad valorem tax on my car- it was around $260 and they wouldn’t let me charge it to a credit card- it had to be either debit or check. I quickly had to scramble that together. So now I make an auto debit to that account so it’s safely there when I need it. An expected expense like this shouldn’t come out of my big, emergency savings account because it’s not an emergency. That’s why I like it separate.

    For vacations and wish lists, I feel like the separate account gives me permission to spend that money. It feels like a complete start to finish transaction. I always intended on that dollar being for vacation. If it was all in one pot, I have the opportunity to haggle with myself about how much or how little I should spend on vacation since it’s not separated. It also ensures that the dollar does indeed go to vacation and the only way I would use that dollar for something else would be in the case of an emergency.

  6. Her definitely. I used to do it your way, but this “envelope” method of saving into multiple accounts actually works really well for lots of reasons. First, and foremost, if you have a down payment account, you know never to touch it. You just feed it. But, by treating your regular savings account as your down payment account, you’re constantly picking at it anytime you want to travel or want to splurge on dinner or pay off your credit card. All of those dent your savings. It keeps you constantly thinking about opportunity costs which is probably unhealthy.

  7. My wife and I keep a savings account that houses the BIG balance for our E-fund and House down-payment savings. We then have a second, regular BOA savings account for things like: car maintenance, medical expenses and fun. We only have 2 accounts, but in Quicken I have separated them out in these 5 categories.

    Why? Well because we have (5) specific things we currently save for. We want to be able to save for “fun” stuff while leaving our emergency fund intact. This way we are saving and spending from specific buckets.

    Word? Thanks for turning your comments back on 🙂

  8. I’m on GN’s side, as long as you keep it reasonable.

    I have:
    Emergency Savings
    Auto Savings
    House Savings (I will actually siphon this off into a CD for the higher interest rate every year or so)

  9. I agree with GN. I have 2 savings accounts – one for long-term goals and the other for short-term like a $1000 phone or something while the other is for, well I don’t actually know but bigger ticket purchases. Funnily, my BF thinks pretty much in line with you and would probably agree.

    I just like the idea of having things separate and knowing what is for what instead of having multiple goals in one account.

  10. My SO and I each have one savings account. Big money pots for the win! I occasionally feel guilty for dipping into savings, my SO doesn’t.

  11. I like the concept of dedicated savings accounts, however it should not be a license to spend. If you are creative and frugal you can stretch your money.

  12. Looking at the one big account creates that problem of money that’s burning a hole in my pocket. It sucks because while my savings are pretty big, my income sucks. Quite the dilemma :/

  13. Right now we have two personal savings accounts — rather inexplicably. It started before we were at all smart about money, and I would put small change into one account and we saved it for vacations. Then when we got a clue, we changed that to our emergency fund and the other account was basically overdraft protection. Now that we’re even smarter and don’t have overdrafts anymore, we just weirdly have two accounts. One of which he can’t access (it’s in my name only) and the other of which I can’t access (I somehow never got a card for that & I never have the account number handy.) It’s totally ridiculous.

    That said, I think I prefer GN’s method. I expect that we will eventually have an emergency fund, a land fund (to save up for land we want to buy and build a house on), and a third for saving for smaller things like cars or computers or vacations or whatever.

    And I care how it’s split up because it’s just easier for my brain to comprehend that way. The other option would be to keep track of it on a spreadsheet, but I think I’d be more tempted to take from the land fund to pay for a computer or something if I did that, you know? So it’s about keeping it straight and keeping myself accountable for my own purchases.

  14. Sorry, but I’m going to have to side with Girl Ninja on this one. Number one because she’s a girl and we are always right and number two because it’s not that hard to add. I like the idea of knowing that I can use a specifc savings account for a splurge that I’ve been saving for. You could always just log into a tool like Mint to see all of your accounts in one place. Or keep track on an excel sheet, or a calculator…

  15. I’m with Girl Ninja (my finance would agree with you if he read PF blogs – so I thought I’de let you know so you got one more vote)

    We have the following accounts

    – Christmas Fund (gets at least $1000/year)
    – House Fund (Down Payment/Closing Costs/ ect)
    – Emergency Fund
    – Wedding Fund

    We also have our own RRSP/TFSA’s and personal allowance accounts.

    This works reallly well for me because then I can track progress to each goal – it’s also helpful for me to explain $$ to the fiance. When he see’s say $10,000 in one bulk account – he sees a flat screen TV for himself. But if there’s $X in each account then he can see that ‘oh that’s actually for emergency’s and a TV isn’t one’

    I like ING because it totallys all the accounts together at the bottom – so if J wants the big picture he can see it and when I want to look at things broken down I can.

  16. I must say I am on the side of the MRS. I too like having different accounts for different goals. It helps keep your savings organized.

  17. We have multiple goals (makes my spreadsheets fun!). So I’m with Girl Ninja (I have learned the old lady is always right)

    Currently we have:
    1. Emergency Fund (always contributing)
    2. Normal Vacation Fund
    3. Vegas Fund (gambling money)
    4. Anniversary Vacation (We got married on Feb 29 so I promised every 4 years we would go on a big trip)
    5. Basic Savings (usually sits at 2.5K so it is like a quick emergency fund)

    Funds 1 – 4 are in “high yield” accounts, while fund 5 is in the same bank as the checking account.

    This of course does not include the investment accounts/IRAs.

  18. Sorry, but I am with GN on this one. Although technically everything is in one bank account, (my checking pays a rate far higher than my savings), I have it broken down into separate “accounts” on paper. I probably have too many of these but as a recovering spender, I can not express how much it has helped me in learning to live within my means:

    medical, dental, and eye doctor (including glasses/contacts) could all be in one fund and I sometimes transfer funds between them based on what is going on healthwise, but my brain likes to see them separately funded. there are also “accounts” for:

    emergency fund
    house down payment
    car registration, maintenance and AAA
    pet expenses/vet bills
    sunny day fund (for when the opportunity to do something fun comes up unexpectedly–if I have cash in the account I can do it!)
    wish list
    subscriptions (sounds weird, but its easier to fork out the dough for a subscription if I already have it set aside)

    Most of these accounts get a small amount each payday–anywhere from $5-$20. The health-realted, e-fund and house accounts get more. I’m sure it sounds persnickity to some, but it works for me.

  19. I use separate savings accounts. Efund, vacation, savings (basically an efund for our efund), house payoff. oh.. and car savings. yeah… too many huh? Whatever works for you is what’s best. If you are focused on a big goal, which you are!, then I can see why you would rather have it all in one. You don’t want to spend 2,000 on a vacation if you are trying to save 100,000 for a house. I see that.

  20. We have one dedicated savings account (that’s actually a checking) and one normal checking account that we dump all the rest of our money into. The dedicated savings account is specifically for emergencies and tuition. I know it’s kind of weird to combine those but I figure emergencies don’t always happen, and aren’t always $$$$, so that money should be available for tuition use as well.

    If we had more money, and more things to save for, I would probably open more accounts so I can’t “accidentally” use the money allotted for something else.

  21. GN wins this one.
    I don’t touch accounts when they are specifically allocated. It was too easy to “forget” what part of the money was for. ING accounts give a bottom line total.
    #1. Annual expenses (property tax, house & car insurance, DMV fees).
    #2. House repair (major)
    #3. Mortgage ( for auto deduct)
    #4. Burial expenses for Mom
    #5. Checking and savings for every day
    #6. Credit union account I haven’t got around to closing (was emergency fund)
    #7. Emergency fund
    Some day I should start appliance/furniture and car replacement funds.

  22. Nah, I’m totally with Girl Ninja on this one, and entirely because of the “guilt-free spending” thing. If I have $10,000 in a savings account, I’m not going to want to touch ANY of it, because that could be going towards a down payment on a house, or a new car, or grad school or…ANYTHING. But, if I have $5,000 in a house fund, $3,000 in a grad school fund and $2,000 in a travel fund, you better believe I’m going to spend that $2,000 on a vacation and not think twice about it. And then, two weeks later, if I want to go on another vacation, but see $0 in the travel fund, as opposed to $8,000 in a savings account, well, then I’m out of luck until I can build that back up again, regardless of how much I *actually* have in savings. This way actually seems more efficient to me.

    That said, I DO keep call of my savings in one account, and separate it into separate “accounts” using an excel spreadsheet. So I still get the satisfaction of seeing one big balance grow, but also being able to allot difference deposits to different things. Best of both worlds?

  23. I am in complete agreement with Girl Ninja. We have our EF in 2 TFSAs, a general savings account for savings and some planned spending, and savings accounts for property tax, vehicle 1 insurance (the 3 others are to come as we pay this year’s car and house insurances), my hobby savings account and we will probably soon start another for vacations and other planned spending. If I need to know how much I have total, I add it up. I need to know where I am with each planned spending so we are not caught short.

  24. GN for sure!
    I love multiple dedicated accounts…checking and savings. We have separate checking accounts just for rent/mortgage and it is probably my #1 favorite new money management practice I have. Dedicated savings accounts for e-fund, travel, kid stuff (school/classes), car and house down payment.
    I would love separate accounts for each line of the budget if possible. However hub sides with you and the ‘all in one pot’ concept (but he doesn’t help with budget/bills at all, so I get to do it my way:).

  25. I see both sides of the coin, but GN gets my vote… Hubby would be on your side, Ninja… so we have multiple accounts… because I’m the Mrs., and a “happy wife makes for a happy life”… here’s what we have:
    Emergency Fund (for big home/car repairs, vet bills for the furbabies; the “just in case” money)
    US Acct – spending money for our inevitable trips south of the border… ie: VEGAS!
    1 TSF… soon to be 2 (likely to be used for a newer-to-us car)
    2 RSP’s
    Canada Savings Bond – auto deduction from my pay and gives us about $1200 that is typically used to pay for part or all of our annual vacation – I’m toying with the idea of stopping this, but moving the deduction into my TFS..

  26. 1. First is tied to checking to cover those unexpected expenses (cut finger off while cooking dinner, had to go to doctor)
    2. Retirement/the World Has Come to an End (I send the checks to a bank in a far off location, get statements every month and assume the money is still there and accessible for when I get to actually quit my job – or if my job quits me and I am no longer able to sweep streets)
    3. Home Repairs (did you know the washing machine will quit working only when it is full of clothes and water?)
    4. Automobile ($400 oil change anyone?)
    5. Travel (there is NEVER enough money in there for the vacation I think I need – like buying my own tropical island)

  27. It doesn’t matter much which you choose if you work out your net worth in the end because weather you have one account or 10 you will still get a big pretty number in the end.

    If I didn’t work out my net worth I would actually prefer the one big number but I think I would be responsible with multiple accounts. Sorry but I can’t take a side for this one.

  28. I’m on GN’s side, but not because of guilt free spending. It helps me to know how much money i REALLY have for something. Let’s say I want to take a $3000 vacation, and I look at my savings and see I have 30k, so I’m clear to go, right? Except what if I am trying to buy a house in the next year? Then… no.

  29. I’m with Girl Ninja. And my hubby is also – so that’s two votes for the wife.
    We have 4 savings accounts (3 at ING) and 3 checking accounts. Checking accounts are:
    1-Hubby’s allowance (he likes to save it up and buy big things)
    2- Rental house expenses
    3- Normal expenses.
    Savings are
    1- $1000 attached to our checking for overdraft or to quickly access it if someone doesn’t take a cc
    2- Emergency fund
    3- Irregular expenses (we use a spreadsheet to break this into specific categories like insurance, Christmas and vacation)
    4- The Debtinator account. Our 2nd mtg is held by my parents, so every time we pay extra, we have to re-calculate the amortization. I HATE re-calculating it every month, so we save up and pay extra in December in order to have only one chart that we can use from Jan-Dec.

  30. Yeah, I’m with your girl. When I get a little antsy to see big numbers, I just look at the total balance held by ING. Here’s what I have accounts for:

    1. Emergency Fund
    2. Car repairs and insurance
    3. Travel
    4. Home (mostly this is a new furniture fund)
    5. Long term savings
    6. Short term savings

    Those last two are a bit duplicative – right now they are both dedicated to the purchase of a new car. Once I buy the new car, I will have to define these accounts a little better, but basically, the long term savings will for big things in the next 5-10 years – weddings, house down payment, etc. The short term savings will be for big purchases within the year, such as flying lessons! So yeah, having all these accounts doesn’t always make perfect sense, but do whatever works for you so long as you can pay for your life without needless debt!

  31. GN reasoning prevails!

    DH and I have:
    TFSA – that’s our EF
    House Account- the mrtge payments are taken fromthis, and it’s where every extra penny is thrown
    Vacation account
    And as I finally paid off the last of our cc debt yesterday – pause for the big YAHOO and celbratory dance – I’ve now set up a car account (hoping though the 12 year old corolla goes another 10 years!)

  32. we got tired of maintaining a bunch of savings accounts, so now we just have 2:
    1. Emergency Fund (EF)
    2. Envelope Savings (ES)

    at this point, the EF is funded, so everything gets dumped into ES. The ES account is basically a Ninja style account with everything dumped in it. we also maintain a spreadsheet that gives every dollar in the ES account a name, and earmarks it for that purpose. you might want to try it out as a compromise. for example, if ES has $10K in it. it might look like this:
    travel fund $2k
    car fund $3k
    house savings $5k

  33. I used to think like Ninja G but when we moved to Portland (from another country!) I decided to rationalize that whole mindset. It also helped my husband understand where I was coming from. So now, we only have 1 savings account for goals but in our budget & spending spreadsheet I created a tab for allocations. When we want to, say, go on a trip, we simply look at how much is allocated for it. I realized that all this time, this was what I had really wanted and not necessarily create multiple accounts. Like you, I also think that dumping all savings into 1 account would have more interest earned. Only recently did I create another savings account specifically for emergency fund so that we wouldn’t have the need to destroy the allocations that took us a while to agree on! 🙂 Men! 😉

  34. […] Debt in the Face asks whether you like to have one savings account for everything, or separate accounts. Personally, I like having separate savings accounts for different purposes. It takes less effort […]

  35. Right now I have a reg saving account and a TFSA. I use the reg account for my yearly purchases which is about 4 different things. At times it can be frustrating seeing all the money grouped in there especially when I take money out to pay a bill, but most of the time it’s easier because it’s all in one place. Personally I would love to have separate saving account, but the yearly expenses are due around the same time so I don’t see the point.

  36. I would prefer to have different accounts for different goals, but we get the best money-market interest rate from one particular account, so … everything goes into that one. At the end of the day, I just can’t object to a sweet savings interest rate.

  37. Having two accts in this days economy makes alot of sense.The problem is,not many have enough money to even need multiple accts. Nice read.

  38. Sorry, my younger savings junkie, but I said with GN.

    We may look at having a larger cash warchest the same way, but having it mixed up into different accounts is really where you see the worth.

    If I were to name my accounts, I would be among your readers who have over 15 accounts.

    But if my fiance and I want to go on a trip, the cash is all there.

    Home upgrades? Got it.

    Emergency fund for something unexpected? No worries.

    IRA? Gifts? Holidays? Credit Card arbitrage? All taken care of.

    I have weekly and monthly transfers set up where X dollars is placed into a different account for a goal. So when the time comes for that expense, it is already take care of. If I did it your way, I would see that money you guys have as down payment money ONLY. What good is having all that cash and not being able to truly enjoy it?

    • Completely agree. We have a ton of savings accounts which just make it easier for me to see how far along we are on specific goals. For us, if we had all of our savings in one account, it wouldn’t really give us the information we needed to figure out how far we are from each goal we have. I would continually have to break out the big sum to figure out how much was there for each goal, rather than (easier in my mind) adding up all the accounts if I want to know my total savings.

      If you need $100K for your downpayment and you only have $50K right now, you aren’t any closer to your goal than if you split out $40K for downpayment and $10K for vacations/car repairs/gifts/etc (that you might also have planned). And in fact, you might end up spending more out of your “big” account because you feel like you have more money than you actually do.

      When I look at each of our savings goals, I know exactly how far away from each goal I am. I have auto-deposit set up which take into account the amount of interest I earn in each account, and have a timeline of when I can achieve each goal. At this point, we are looking at at 2, 3 and 5 year goals – so its not like I am looking at the accounts every day/week as it is. We are in the long haul portion of finance at this point, so trying to feel like there is more than actually exists isn’t helpful.

      So, while I agree it is all money – separating it out helps me not to double count the amount of money I have when matching it to goals I have.

  39. Perhaps not surprisingly, I am a fan of just having a single savings account while my wife is a fan of having multiple.

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