Ask the Expert: Should I Use Multiple Accounts?

Dear Ask the Expert, Should I Use Multiple Accounts/Banks?

It is way simpler to track and reconcile one bank account, but there are some times when using multiple accounts may be more practical. These include:

• Budgeting. Budgeting with multiple bank accounts could prove easier than with only one. Multiple accounts can help you separate spending money from savings, and household money from individual earnings
• Tracking savings goals. Having multiple bank accounts can help track individual savings goals more easily.  For example, if you’re saving for overseas travel, a wedding, or Crop Over, using separate accounts may be useful
• Separating finances. For spouses and domestic partners who prefer to split household finances, multiple bank accounts can help you spend and save in a way that’s right for your relationship
• Raising money-wise children. Adding a joint bank account with one of your children can help you teach them good money habits, like sticking to a budget
• Benefits.  Using different banks can help you take advantage of different benefits specific banks offer

Using multiple accounts/banks can be beneficial, but it depends on your personal circumstances and goals. A chequing and a savings account are advisable, at a minimum. You will need to assess whether additional bank accounts/banks align with your objectives and lifestyle. Each person’s situation is different, so choose what works best for you! 

Lydia R. McCollin, FCCA, FCA, is the Managing Director of LRM Consulting Services Inc.

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