How do you manage your bank accounts?


Quick Answer

One way of managing bank accounts involves having several of them, with each account serving a specific purpose. A typical household should have about five bank accounts to help manage and keep the family's finances in order, advises NorthShoreBank.com.

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Full Answer

A direct deposit savings account should ideally be set up as a joint account by a married couple. This is the account where the two owners deposit their main sources of income. The direct deposit savings account should serve as the base account from where the owners transfer money to all the other accounts.

Having an account dedicated to paying bills, such as a bill payment checking account, is also important in managing finances. The money that is transferred into this account from the direct deposit account should be enough to cover all monthly accounts that are constant including utility bills, Internet subscriptions and gym memberships.

Experts recommend setting up an emergency savings account in which the funds are set aside only for certain unexpected situations that require immediate cash. Transferring money into this account should be gradual until it is equal to about two to six months of income, states NorthShoreBank.com.

A general checking account gives the account holders additional options. This account can be used for general day-to-day expenditures such as gasoline, groceries, hobbies, eating out or for entertainment for the family.

Finally, some banks offer a health savings account in which account holders can save funds tax-free for any medically related expense. This type of account functions just like a spending account offered by health insurance companies.

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