Finances are an important (very important) part our lives and bank accounts are how we deal with them. Financial health is determined by how we balance our money. Below I have listed about 5 different accounts that I feel are useful. You can always modify them to better fit how your mind works but this what I have at present.
1. A current account – for everyday banking e.g the spend at Mcdonalds, the cheeky Nandos or to pay for the cinema. Basically for miscellaneous spending.
2. An expenses account – for regular expenses e.g direct debits, the phone bill, standing orders, etc. I feel expenses should all go out from one account. That way you can easily keep an eye on your regular expenses without the confusion of other random purchases. It will also make it easier to pick up any abnormal expenses or if your bill has cost you more than usual.
3. An emergency bank account – there should be money saved for the rainy days (because they will definitely come). Various sources I have read recommend having 3 months worth of your expenses saved e.g the rent for 3 months, bills for 3 months etc. Having an emergency account will mean you don’t go into your savings when you are in need of cash desperately (your savings will never grow otherwise). If you do take out of your emergency account, make sure to top it back up.
4. Saving accounts (my favourite 🙌) – you can have more than one of these accounts. These can be life savings or saving towards an event e.g buying a house, buying a car, going on holiday etc. The best tip with savings accounts is to deposit regularly and withdraw very very infrequently (I like regular saver accounts for this because I commit to an amount every month which is effectively locked away for a year).
5. Investments – This one I am still a newbie at so I am still learning but some type of investment seems advisable. This money is meant to work for you and yield you a profit. However, this is money that you plan to lock away and you are happy to not see for a few years.
What do you think? Would you recommend a different account?
Until next time
Memoirs Of A Yoruba Girl