April 24, 2013

How to Save Money: using multiple savings accounts



The teaching profession has a lot of great perks...but the salary is not usually one of them. Through the years, I've learned some tips and tricks that helped me stretch my teacher's salary, all while working around my busy teaching schedule. During this series, I will be sharing them with you! 

This week's tip....

Use Capital One 360 (an online bank) for your savings account. 



  

Really, I recommend using any bank that allows to create multiple savings accounts, this is just the one that I personally use so I feel comfortable pointing you in that direction.

Disclaimer: These are my referral links and I do get a small bonus if you use them. If you find this information helpful, I would be so very happy if you used my referral link. If you are not comfortable with this, you can go to CapitalOne360.com to sign up instead. (And I promise not to hold a grudge) ;) 


What is Capital One 360?

Capital One 360 (formerly called ING Direct) is an online bank. They advertise that without the overhead of a brick and mortar outfit, they are able to offer higher interest rates for their savings accounts than most banks. This may or may not be true- I never really paid attention to the interest I was making because it wasn't the reason that I was using this bank. That reason, my oh-so-interested friends, is the fact that Capital One 360 allows you to create multiple savings accounts when most banks only allow one per customer.


What would I do with multiple savings accounts?

So glad you asked!

It's like this: You know how you just feel better when everything in your house is put away in the exact place it belongs? So when you need that favorite pair of scissors they are *gasp* actually in the drawer? What if you just threw everything in your entire house into one room? Things would just naturally get lost in the pile. Food would expire and become useless. Items would break and never get fixed. Things would get wasted.

That's kinda what your money is like when you just put it all in one account. You know you need to set aside money for your son's preschool, the trip to Disney next year, Christmas presents, the once-every-year tax bill (eew), the new tv your husband wants needs, a newer car, and a million other things.
When all that money just gets lumped together something strange happens: it just seems to wander off. Ten dollars here, five dollars there and soon, that extra money you were going to use to pay for Johnny's preschool is somehow just not there....but you're not exactly sure what you spent it on.

Capital One 360 allows you to create multiple savings accounts so you can keep all your savings goals separate. 


How I use my multiple savings accounts:

We save up for the once-a-year expenses we know are coming. Some bills (or fun expenses) can be predicted. We split the cost between 12 months and deposit that amount each month into that account. Here are just some of these type of accounts that we have:

  • Christmas Gifts
  • Taxes & Fees
  • Anniversary Date
  • Yearly Vacation

We save up for big items that we know we will need to purchase in the future. We choose an amount each month that we are comfortable with and have it deposited automatically into that account. Here are just some of these type of accounts that we have:

  • New Car
  • New Computer
  • Auto Repairs (because repairs WILL happen, ya know?)

We use it to save up for one-time large items or goals. When extra money finds it's way into our checking account, we don't wonder what we'll do with it or spend it right away on impulse buys. It goes right into one of these 'goal accounts.' When we've reached one goal, we start chucking money at the next one. Here are just some of these type of accounts that we have:

  • Preschool for our son
  • Extra spending money for our vacation this summer

We've set up an automatic payment for some of these accounts. Each month, a certain amount is automatically taken out of our checking account (at a bank in our town) and transfered to these accounts. We treat it like just one more bill, but this time we're paying ourselves. 

Why do I love using Capital One 360?
  • Automatic transfers. As a teacher, I didn't have a lot of free time to do one more money management thing. I needed something that was automatic and Capital One 360 provides that for me. I set a certain amount to be pulled out of my bank account on the same day every month and it automatically happens. 
  • It gave us a tangible way to see our progress on each of our savings goals. We could log on at any time and see which accounts were fully funded, which ones we were working towards, and how much we had in our total savings.
  • Our money 'belonged' somewhere. Even though it was technically all still our savings and we could spend it any time we wanted, it was hard to justify pulling money out of the vacation account to pay for a new tv. It was all in our heads, but that hesitation to use money that was already 'assigned' somewhere helped us avoid a LOT of needless spending. 
Want to try this out for yourself? Sign up for a free account here

Do you use Capital One 360? Share your thoughts about it with us!

Find more great budget tips for teachers here.


(Capital One 360 did not compensate me for writing this post. All opinions are my own and stem from the fact that I've had a very positive customer experience with them. I do, however, get a small referral bonus is you sign up using my link. If you are not comfortable with this, you can go to CapitalOne360.com to sign up instead.)

1 comment:

  1. We use Cap One 360 too and love it! We save money for Christmas in it. We also opened a checking account with them so that we could use that debit card to pay for Christmas presents. We just transfer the Christmas account money to the checking account in November and use that card to spend that money. It keeps us on budget and it's WAY more fun to buy gifts when we know the money's already there (as opposed to using a credit card).

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