In the struggle for financial independence people often find abundance of hints and advice aimed to assist them in reaching the financial paradise. Some tips are good, but often you come across gimmicky tricks as well. The main most important skill one should master to manage his money properly is saving. No matter what your goal is, whether it’s long term, retirement for instance or short-term – some kind of a special holiday, the capacity to put money aside on a regular basis is supreme if you want to reach financial success.
In course of the years people have tried a lot of various methods of saving means for long-term expenses and aims. Some people keep record on a spreadsheet, which allows them to follow and know how much savings are accumulated for each purpose already. There are people, who take cash using Sterling Store offering fast loans in UK and keep it in different envelops or boxes. One more effective way to save money is to set up special accounts for different purposes and accumulate money on each of them. This is actually to what our article is devoted.
When you initiate multiple saving accounts, you can designate each for a certain aim, thus you get a number of targeted accounts. One might be for annual holidays, one for insurance purposes; another is for emergency payments or for eventual down payment on a new home or a car. If the goal demands consistent saving, there is no limit to the kinds of them.
Where can multiple savings accounts be kept?
The majority of banks will provide you with the opportunity to have as many accounts as you wish, the only drawback caused by the recent changes to the system is that it may be difficult to skip all the hoops to avoid fees. One of the most convenient locations for the long-term saving accounts is online banks, due to the fact you can open new accounts without striking a blow and realize money transfer directly from your main account of any bank.
A real advantage of separating your savings accounts from your daily checking account is that it takes several days to transfer means between them. Though you may first look at it as a drawback, yet it prevents you from impulse purchases with your hard-earned savings. Money put aside for certain goals should not be spent unless there is a real emergency or change of plans. The sale held at the mall does not count (if it was not your saving goal).
Calculating the amount required
As soon as you have set up the accounts, analyze and define the amount which is necessary to be deposited regularly to reach your goal. Let’s take a Christmas budget as an example. If you open the account in April and want it to contain 400 pounds by December, just divide the amount in 8 months and make sure to transfer 50 pounds each month to this very account. In such a way you will not have to withdraw means from your credit card at the end of the year, having your Christmas Budget accumulated in advance.
Automation is the key
Very often automation of the process is the only way to effective saving for the majority of people, like it’s usually done with retirement account. Without any doubt there will always be a lot of reasons to postpone the payments till the next month as many circumstances will set in seeming urgent. Automating the money transfer process you make sure you pay yourself first. Almost every bank allows transfers on a weekly, biweekly, monthly, or even quarterly basis. Making use of this option is almost as important as setting up the accounts themselves.