June 3, 2008

Why I Have More Than 1 Bank Account

Posted in financial decisions, planning, saving tips at 8:04 pm by kimsan23

Saving money is a discipline. Discipline with saving up isn’t something I automatically developed as my parents taught me the ins and outs of personal finance. Truth is, I took after my dad who has almost zero skills in saving money. It was my mom who really knew how to handle finances and save for a rainy day. She helped me open my first bank account, which I ended up closing just because I used up all my funds. Mom would literally nag me into opening new accounts but I was always short of cash and could not maintain a bank account’s minimum balance. When I started my own business, money kept going out of my checking account but not in. I lost again. I was spending exactly what I was earning with absolutely no concept of trying to turn a profit out of a business or saving a small portion of a salary. Everything cash went somewhere else — away from any bank account or even piggy bank for that matter.

Just about this time last year, I had decided to start saving up. Seriously saving up. Even if it meant putting away just 200 pesos every payday, at least I was getting somewhere. The company I was working for closed and gave us all separation pay. As soon as I received mine, I immediately decided on the different ways I could use it. A good portion went to opening a bank account with a maintaining balance of 10,000 pesos. The other good portions went to credit card debt and of course, a few splurges — after all, it was my money.

At that time, I already had 2 bank accounts in different banks. One of them was a joint account and the other was a personal one. Recently, I bought into a time deposit — my 3rd account.

So why in the world do I have all these accounts? Simple. Since I do not have the discipline to maintain a plain bank account — I opened several with limits.

1. Joint Account – Since it’s joint, I could not spend the money in it without informing my co-depositor. I keep tabs on the account, checking what money goes in and what goes out. So far, we’ve maintained pretty well since January of this year. No money goes out unless it’s needed and is mutually agreed on. This account is the one we use for emergencies. So the money here is pretty much temporary– meaning it could be withdrawn any time.
2. Time Deposit – This one’s locked up for 7 years. Hence, no touching unless absolutely necessary.
3. Personal Account – I opened this one as a passbook account with no ATM access. I made sure that it was easy to deposit (inter-branch with no fees) but hard to withdraw. I could only make a withdrawal at the main branch which is technically hell to go to.

So far, it’s been 5 months since I started fixing my financial set-up and I am proud to say that I have been able to ably discipline myself. My savings are consistent — I keep track of all deposits and withdrawals. I have been able to develop a savings-only mindset which allows me to allot a fixed amount for savings every payday.

Next thing I have to work on is…how to stop taking money from my piggy bank!


1 Comment »

  1. Baneneng said,

    I agree, money management is simply discipline — the discipline to handle your resources to fulfill your dreams. I too started working on my financial goal two years ago and I’m glad I did because now I can see my efforts are paying off. Kudos!

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