Like I’ve said before, I love DailyWorth. Here’s an interesting article about different savings accounts.
Do you have different savings accounts for different reasons?
But how many savings accounts does it make sense to have, outside of retirement?
A: You need at least three active savings accounts.
Curveball fund. Automatically transfer at least 5% of every paycheck, to cover random expenses (a lapse of reason at a yard sale, a broken toaster).
Emergency fund. Ditto, but only tap this in a true do-or-die crisis. When they say, “Save three to six months’ worth of living expenses,” this is where it goes.
YouNameIt fund(s). Set up at least one other account for a looming goal or project: a cushy reading chair for the bedroom, a holiday party (or getaway from the parties), adopting a child.
I only have an emergency fund, which I consider a fund for ANY type of emergency. It could be a potential job loss, unexpected bills, risen expenses and so on. Ever since reading DailyWorth, I feel like I’m the only one on the website who doesn’t have multiple accounts.
Your turn: How many do you have? Do you feel like it’s necessary?