Browse this list of 6 different types of bank accounts and find the family bank account that is perfect for your lifestyle. Plus, learn the differences between each and learn how to set your family up for financial success!
Most of us were told our whole lives to have two accounts: one checking and one savings account. But have you ever considered opening more than one family bank account to help you organize your money better? If not, then you should!
For my husband and I, this is one of the easiest things that we did to get control of our finances. No, you don’t have to have lots of money to do it at all! Remember, we made it work off of $17,000 a year! And when we started having more than two bank accounts, we were still living very much paycheck to paycheck.
I don’t know how it started, but almost every family and person that I’ve spoken with has just one savings account and one checking account. This system might work well for many, but I would bet that only having one or two bank accounts can make it harder for you to keep track of your money. Statistically, most families have trouble making and keeping to a budget.
Based on that, we can tell that the system of one checking account and one savings account just doesn’t work well. What I’m going to suggest might sound a little bit crazy here. But bear with me, and it might be the best thing that you’ve ever done for your finances!
I have heard a lot of questions from many different people about the number of bank accounts that we have. Does it cost extra? Does it make everything more complicated? Is it difficult to keep track of?
The big answer is no. If your bank is charging you to own that many bank accounts, then you need to find a new bank. Having six bank account does not seem as crazy as it does on paper. In practice, it is a really easy way to manage your finances without even really having to think about it.
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How many family bank accounts should I have?
The number of accounts you should have depends on your lifestyle and how you manage your money. The more you separate things, the easier it is to control your spending habits. I found that having six bank accounts is perfect for my family. I have a really simple way to manage my savings, my spending, and every single other area of my finances.
Browse this list of family bank account ideas and pick out the ones that make the most sense for you. Honestly, the secret to money management is to do what clicks for YOU! If something I do feels awkward for you, then don’t do it. Change it. Find the solution that works best for you and your family.
How do you track that many different accounts?
If all of your accounts are with the same bank, then your online bank app or dashboard will have everything right there for you in one place. But if your accounts are with different banks, then you can use mint.com. It’s an app that pulls information from all of your different bank accounts and puts them on one single dashboard.
It’s a really great mobile app that is really handy to have, especially if your bank doesn’t have a good mobile app yet. Another thing I absolutely love about mint.com that I just learned about recently is that you can even pay bills from Mint! It’s pretty awesome. All in all, if you are able to use your phone and a computer, you can handle six bank accounts.
6 Family Bank Account Types To Organize Your Finances
These are the six family bank account types that will help you manage your money and finally be in control of your spending. Read through this list and set up the accounts that will work for your family.
1. Emergency Savings
The first account that you should have is an emergency savings account. Your emergency savings account is just that: for emergencies.
It is for things like, “We are going to lose the house if we don’t use this money.” Under no circumstances other than losing your house or an equally terrible emergency are you allowed to withdraw from this account. It is the bank account that should never be touched.
- Set up this account at a different bank. That way, I don’t even see it on my bank dashboard. I’m not even tempted to use it because I don’t see it. You should have at least 6 months to live off of in this bank account alone. Some people would say that having all credit cards paid off is more important than having an emergency savings account, but I absolutely disagree with this! If my husband loses his job and I don’t have an emergency savings account built up, I could lose my house. I am really okay not having all of my credit cards paid off while I am building up an emergency savings account.
- Set it up so that your checking account automatically deposits into savings each month. If you get paid every week, have your automatic withdrawal setup for payday and it will never even cross your mind that it came out of the account. Out of sight, out of mind, right?
- Don’t stop once you reach 6 months of living expenses! The ideal goal here is to save 12 months expenses. Again, if someone loses their job, you want to be able to keep your house! Once you hit 12 months of savings, don’t stop there! Ideally, you will never stop depositing 20% of your income into this savings account.
By automatically withdrawing money from your paycheck and depositing it into a family emergency savings account that you will absolutely never touch except for when you are truly having an emergency, you can protect your family from the worst-case scenario circumstances.
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2. Regular Savings Account
Now that the heavy stuff is out of the way let’s talk about regular savings!
One of the most important family bank account types is a savings account, so on top of your emergency account, you will need a family regular savings account.
Think of this like your “oopsie daisies” account. It’s the “Oh my goodness, I forgot that I have to get an oil change this month, and I didn’t set aside my budget for it!” savings account. Always keep three months’ worth of cash to live off of in this account in case of a short-term emergency.
Once you have that amount built up, this is where you will save money for things that you want but need to save up for: like a new down payment on a house, getting your kitchen remodeled, a vacation, a new car, etc.
I also use this account to pay for unexpected emergency use. If one of my kids has to go to the ER… again… this is the account that I take that money from.
- Automatically put 10% from your paychecks into this account. Once you have at least 3 months of cash saved up in this account, put the extra 10% into your emergency savings account.
- If you are trying to save up for something in particular, bring the 10% back and continue to add to the account until your amount is reached in full.
- Keep this savings account at the same bank as all of the other accounts. That way, it’s easy for me to track how much longer I have until I reach my goal of what I’m saving for.
- It’s also important to remember that this account should always have at least 3 months of expenses that you need in it. No matter how much you want something right now, it’s much better to save up for it and to wait to buy it then to spend this emergency amount and risk actually needing it!
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3. Family Checking Account
This is the account from which everything happens! All paychecks and all other kinds of income go through here, to begin with. All money starts here and is then transferred to all the other accounts.
This is where you pay for minor car repairs, home repairs, utilities, and all other bills, donations, and other family-related expenses.
- All bills are paid from this account. Preferably on auto pay whenever possible to avoid late fees.
- Money shouldn’t stay here for long. It should be sent into all the other accounts right after it hits the checking account so that you don’t even miss it when it’s there.
- Transfer leftover money into savings. Now here’s the big part: once all of your money has been deposited into this account and sent to where it needs to go, it will be easy to see if you have money left over at the end of the month. If you have money left over that hasn’t been spent, it should go into the regular savings account.
- You only need enough in the account to cover your expenses each month. You don’t want to have too much excess in this account after all your expenses have been paid for! Any money that is left over at the end of the month should go directly to that first. Once that has been paid off, then it goes directly into your savings account! If it sits in your checking account you will be likely to spend it! And that’s the opposite of what we want to do with all of these extra bank accounts!
- But it’s very important to make sure that you have enough in the account that you don’t ever overdraw it! The best way to figure out how much you need is to look at your spending habits from the past six months. Total of how much you spend each month and then subtract minor emergencies. Average it out and start from there.
- Make sure that your bank doesn’t have a minimum required amount. If they do, make sure that you always have more than that. This is a great way to ensure you don’t get slapped with hidden fees!
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4. Family Bank Account For The Wife
This is the money for everything that the wife buys in a month. For my family, this is the account that I have my groceries come out of. And at the end of the month, whatever is left over, is fun money for me! (Don’t worry, the same thing applies to your husbands!)
Sit down with your husband and write out every single thing you each spend money on, then divide up the responsibilities between the two of you. In our house, I buy the groceries. My husband handles the car repairs and gas for the cars, so that comes out of his account. Whatever you each are good at and handle regularly, that’s what you should be in charge of!
The division of responsibility is incredibly important to a relationship as well as to a budget. And this is different for every family! Whatever works for your family and whatever your skills are, play to those skills. You don’t want to be in charge of something that you know nothing about!
- Set up automatic withdrawel. This account should have an automatic withdrawal from your big checking account each week.
- Use it for fun money. At the end of the month, if you have leftover money, you can either choose to spend it on fun stuff for you or add it to your FUN fund at the end of the month. (Which we’ll talk about in a little bit below.)
- Do not use it for family expenses.This account should not include family expenses that should be paid from the big family checking account. Bills, home repairs, medical expenses, new furniture… Everything like that should be paid out of the family checking account or family regular savings. You should have enough in this account to cover your personal financial responsibilities for the month.
If you run out of money before the end of the month because of poor budgeting, you need to see what went wrong and where you could have made better budgeting decisions. But it’s also important to see if maybe you didn’t actually give yourself enough money in the budget or if it was an overspending problem on your part.
If you have a family of 5 and only budget out $100 a month for groceries, you’re going to go over budget! (Unless you’re actually making it work on $100, in which case, email me now!) The first few months with this budget are probably going to be a lot of trial and error, but it’s okay as long as you figure it out and work on fixing any problems.
5. Family Bank Account For The Husband
This is the exact same thing as with the wife’s checking account. It’s really important to have balance! The same rules have to apply to both the husband’s and the wife’s checking accounts.
Having separate husband’s and wife’s checking accounts gives each person the freedom to spend however they see fit while still being held accountable for the overall amount in the budget.
It motivates each of them to be frugal and stingy wherever they can, as well as helping to allocate spending responsibilities for a family. And it makes the who’s in charge of what aspect very clear.
This clarity helps to clear up fights about money – which is obviously very important! Since the number one thing that couples fight about is… wanna guess? Money!
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6. The FUN fund!
The moment you’ve all been waiting for: the FUN account!
This is the extra money that has been left over at the end of the month once the bills and all other responsibilities have been paid for, and you’ve built up your savings accounts for the 3 and 6-month amounts, and all credit cards have been paid off.
This is the completely fun money account. This money does not go to paying bills or anything structured like that. Once your debt is paid off, and your savings is under control, this account is to reward you for spending wisely. And who doesn’t want a reward at the end of the month?!
- You need to have a plan for this money! You could use it for a new couch, a new kitchen, a vacation, or anything else that’s fun that your budget would not allow you to buy immediately.
- Get the whole family involved with this particular goal. Whatever it is, make it visible to everybody. Especially with children, getting them involved in savings is so important at a young age! Having them be able to save money and see what they’re saving for is incredibly important and it’s also very motivating for them.
- Setting a goal for this money is so important because then it is less likely to burn a hole in your pocket before you have enough for whatever you’re saving up for. Having this kind of an account encourages family excitement for spending wisely and frugally and for saving up over time.
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Family Bank Account Final Thoughts
The bottom line here is that rather than throwing all of your money into one checking account and one savings account, try opening these six accounts. If you have had trouble with your finances in the past, this is a great way to help your family get your budgeting and spending on the right track!
Automatic Savings Apps
One of my best tips for creating a padded savings account is to do it automatically. You don’t have to do a thing – it does it all for you!
Here are my favorite resources for saving money automatically:
- Acorns – Acorns is a free service that rounds up your spending and saves the change from every dollar you spend. It then invests that money so that you can make more in the long run. It’s free to use and I have saved more than $500 in 6 months using it just from round ups! Try out Acorns here.
- Digit – Digit is another automatic money saving app. They analyze your spending and save money based on how much is in your account and how much you typically spend. It’s a great way to build up a savings account! They do charge $2.99/month to use the service, so it isn’t for everyone when you have the option of Acorns for free.