I Just Opened 6 Savings Accounts at My Credit Union. Here's Why.

I recently wrote a piece on how I go about evaluating and choosing my metrics for my business for the coming year, but what I didn't mention in that article was the other thing I did at the beginning of the year to help reach some personal goals. I opened an alarming number of new sub-accounts at my credit union.

When I say alarming, it was a "the credit union employee got up to go into another room and was gone a long time" kind of move. I think she was just new, but I really don't know and I may be on a list somewhere now. That's OK, because of this move, I'll be the one laughing all the way to the… well, not the bank, anyway.

What is bucketing?

To understand what I did here, you have to understand the concept of savings buckets. A bucket is a bit of a weird metaphor for what we're doing, but essentially, imagine you've got containers, and each one is for a specific goal. So, yours might be flirty blue jars, or practical white envelopes, or maximalist three-foot-tall vases with gold edging. Whatever you want to stick your pretend money in is fine for this argument.

There are some people who think that if you set up savings buckets (jars, envelopes, vases, etc.) that you'll be more effective at saving money or working toward some other kind of financial goal.

I never was one of them.

Until this year, when I realized I had several savings goals, and two savings accounts. Things were getting very confusing and hard to tell how I was progressing on those goals. So this year, we're bucketing, baby.

Three reasons to use savings buckets

Savings buckets are great if you're terrible at visualizing your money, but pretty good at sorting things into neat piles. In my case, I needed a savings account for a potential major surgery my dog may ultimately need, I needed a savings account for a car repair (I don't drive much, so it's not immediate), for household projects, and the like. For every bucket, I have a need. There are reasons for this.

1. It makes it easier to see if you've reached your savings goals

When you have just one savings account at your bank, your money is all mixed up like so much tepid lakewater. You can't really tell what's in there or how much is allotted for what goal, and ultimately, it's hard to know if you've reached any of your goals without further hassle and bother, which can create a barrier to saving.

With buckets, you can tell at a glance how much is in your account, and if you use a bank like Ally, you can even set it up to show your savings goal alongside your balance. It's *chef's kiss* perfection.

2. You know how much money is for what

Co-mingling funds is a terrible idea in business, and it's not a great one in your personal life, either. When you have a business and you have a bunch of different savings buckets, people say you're efficient and your accounting department is amazing. But when you have them as a private citizen, people look at you funny and don't invite you to parties. It's weird.

But with savings buckets, you can actually tell how much money is allotted to what. As we all know, life is expensive and it's hard to pay for all of our goals sometimes.

By having your buckets separated with a solid wall, rather than an imaginary squiggle, you can say, "I have $500 saved up for the horse skating events in February, but I've only got $200 for monkey cannonballs in July." You won't simply slide some money around in your mind and end up spending extra on horse skating because it's already in the same account.

3. Buckets are reusable

I'm not sure how to tell you this, but saving can get kind of addictive. All that sweet dopamine you get from watching your balance climb in your banking app, the tingling from getting closer to your goal…perhaps I've said too much. But the cool thing about having designated buckets is that you can always use them again and again -- and, if your buckets are like mine -- you might even get some interest out of the deal.

High-yield savings accounts (HYSAs) are particularly attractive, with rates currently over 4.0%. This allows you to make even more money for doing nothing but saving for a rainy day. And you can find these accounts at both larger, national banks, as well as smaller, regional ones. According to research from The Ascent, only 31% of Americans have a HYSA, so you'll also be money ahead of your peers.

Go alarm your bank and open new buckets

If you have several savings goals in mind for this year, now is the time to open a bunch of new bank accounts, sub-accounts, or whatever your favorite financial institution of choice has to offer.

Not only will it make your day and the day of your banker a little bit more exciting, you'll have an easier path to savings goals if you're anything like me and need to see everything in its proper place.