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One Checking To Rule Them All

April 19, 2019

Do you have too many accounts?

If you have more than 3, my answer is yes. I know this will sound like crazy talk to a lot of people, but, I am a fan of one checking and one savings account, and one credit card account (if you must have a credit card). Hear me out and keep reading, okay? It is not uncommon for me to talk with people with multiple checking accounts and several savings accounts and… a couple credit cards…and….some cash…oh, and…maybe one more savings account with a little bit of money in it,..oh, and that Amazon card, and.... The list seems endless and totally justified.

And once upon a time, when I was first trying to “adult,” this described my situation as well! In my early 20’s, I set up an ING savings account. ING is now CapitalOne which is awesome for them (probably) but somehow a little less cozy for us. Anyway, when I got started with them, I had a single, primary savings account, then had the great idea to set up additional savings accounts for things like:

  • Long-term savings
  • Vacations
  • Gifts
  • Car Maintenance
  • Don’t Touch Savings
  • Do Touch Savings (I didn’t call it that but might as well have called it this since I pulled money out of it willy-nilly)

I then scheduled automatic withdrawals so that small amounts of money would be deposited from one paycheck a month into each account. This sort of worked for a few months and I didn’t touch the growing money, but it didn't last any longer than that for reasons I'll elaborate on below. In short, I realize that multiple (savings) accounts sounded smart in theory and perhaps some people experience success with this sort of tactic. But I sure didn’t and you might not either.

The problem with my plan was that I didn’t have a plan.

I didn’t have a plan for the part of my money that was not being transferred to savings. And, just because I had money in several savings accounts, didn’t mean I was actually budgeting for that money either. It was more like I was stashing money in various drawers around the house.

When I, for example, bought a gift on Amazon using my checking account, I wouldn’t always remember to transfer money from ING to cover for it (again, I wasn’t budgeting, just pretending to organize my money). And so what I ended up doing was spending something like my loosely budgeted “utility money” on a gift which was even more loosely budgeted for.

I dipped into these accounts over and over for the unexpected things which “just came up” until the money was gone. Unfortunately, most of these events weren’t actually unexpected; I just hadn’t swept them into visibility and recognized them part of the cost of my life. #denial:)

Life costs more than you/I think.

I essentially spread my money and emotional money energy (it’s a thing) too thin to keep it organized. I thought I was being smart with my money but hadn’t realized that the most important part of budgeting is “sweeping the corners of the room” and acknowledging how much life really costs.

Having lots of accounts doesn’t mean that you’re budgeting. Some people with budgets organize money using multiple accounts, but the budget has to come first, otherwise, it’s just complicating your money. It’s easier to deal with reality (your money) when you have it right in front of you (in a small number of accounts you know and use).

Unsolicited advice and some words of caution. My favorites:)

So, if you’re stressed about money and have 14 accounts or hiding spots for your money, I would way encourage you to consolidate accounts. Move the $17.05 you have in a random savings account to your real savings account, then close the straggler. Repeat for all those loose ends that are unnecessary points of clutter in your financial life.

(Notes of caution) This only blesses you if the following statements are true:

  1. You are fed up with the amount of stress you perpetually feel about money.  If your plan isn’t working, it’s time for a new plan. If you’re always stressed about money, it’s time to do something different.
  2. You are committed to making a change in how you manage your money. This includes getting on a written budget and being accountable to it and yourself for how you’re spending against it.

If you have a gazillion accounts and this works for you to keep your money organized and you’re on track to reach your goals, that’s great! I’m not looking to pick a fight and hopefully, you didn’t mind reading this far to find that out. I just know from first-hand experience how powerful it is to focus your energies and get your resources in a concentrated area of 1-2 accounts.

Oh and…if you are nervous to consolidate accounts, you will find that a tool like YNAB is kind of like having a bunch of accounts, except that these accounts all play really, really well with each other and don’t diminish your focus whatsoever. More on that another time…:)