This Simple Trick Has Helped Me Save a Lot More Money
by Christy Bieber | Published on Oct. 14, 2021
Could it work for you too?
Let's face it. Saving money can be a challenge because it often feels like you're sacrificing a lot now to gain some advantage in the future. But, despite the effort involved, it's crucial to set aside money to accomplish big goals.
Fortunately, I found a simple trick that helped me make this process much easier -- and it's seriously increased the amount of cash I've saved over the years. Here's what it is.
Doing this increased my savings substantially
One of the best financial moves I ever made was setting up dedicated savings accounts for different purposes. For example, rather than having just one or two savings accounts, I have a bunch of different ones. These include accounts for:
- Large purchases
- Emergency expenses
- A new car
Before I bought my house, I also had a home down payment fund set aside.
Having separate accounts has helped me save more money because I know exactly what the money I'm saving is going to be used for. As I see my account balances grow, I can picture the trip I will take once I've hit my target goal, or I can imagine the nice new car I'm going to buy. I can also see my emergency fund balance rising and know that I am well prepared in case surprise expenses crop up, which gives me peace of mind.
By having these dedicated accounts for specific purposes, I'm a lot more interested in putting money into them. It doesn't feel like a sacrifice to give up a meal out or to stick to my budget because it means I can transfer more money into my vacation account. Instead, I'm really excited to move that money into savings because I know that each transaction is getting me closer to being able to go on my dream trip.
Since each account has a dedicated purpose, I'm also a lot less likely to misuse the money than I was when I just had a catchall savings account for cash I didn't keep in a checking account. The money was just sort of sitting there before, so I could find justifications for why I needed to make withdrawals. But now, I know exactly what the money in each account is for. So I won't touch my vacation or car savings unless I'm ready to book travel or buy a vehicle. And likewise, I leave my emergency fund alone unless I experience an unexpected crisis.
Maintaining multiple accounts is easy since my bank allows me to open several savings accounts and have them all linked under one online username. I've also set up automated transfers to each account based on the amounts I know I'll need to accomplish each goal. And having separate accounts makes it really easy to track my progress.
I know I'll never go back to having just one savings account as it's been a pleasant surprise to see how such a simple trick has made a big difference in staying motivated to save. If you're also trying to save for multiple goals, it's worth giving this technique a try.
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