Are Your Checking And Savings Accounts At The Same Bank? Here’s Why That’s Not A Smart Idea
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People love simple. Humans crave ease, especially when it comes to managing money. The last thing a person needs is another app, website, or account to check.
But does our need for “simple” sometimes lead us down the wrong path, especially when it comes to money?
There’s a good chance that your checking and savings account is with the same bank. You’re able to move money from one account to another and keep an eye on both using the same app.
According to CNBC, if you’re not using different banks for checking and savings accounts, you’re probably making a big mistake.
Do you want to save more money? Try tricking yourself into it.
One way to do that is by splitting your paycheck up between accounts at separate banks, so your checking account is at bank A, while your savings account is at bank B.
This trick works because it adds friction between you and your money. When all your money is in one place, it can be tempting to spend it.
But by hiding your savings away, you’ll be less tempted to spend what you can’t see.
Here’s what to do next if you’re considering different banks for checking and savings accounts…
CNBC suggests setting up a budget and paying all expenses out of the checking account and then setting up an automatic transfer of funds to the savings account each month.
The website also suggests splitting up your direct deposit from work so that the budgeted amount goes into the checking and the remainder of the paycheck automatically goes into savings. This way, you never see that amount and you’re not tempted to spend it and don’t touch or look at the savings account until there is a true emergency.
For more advice on bulking up your savings account, try these four ways to spend less money or just try cutting out these expenses.