My Multiple Savings Accounts (and how to get your own)

how to use targeted savings accounts at Capital One 360

In the past when I’ve mentioned my various savings categories (like our vacation savings, or our electricity savings), I’ve had a lot of readers ask how I keep all of this organized.

My secret is multiple savings accounts at ING Direct.

Update: ING Direct is now Capital One 360, but I still love my savings accounts and still recommend using them in the way I describe in this post.

A number of budgeting gurus advocate the envelope system where you have a paper envelope for each category in your budget, but since I don’t use cash for much of my spending, that doesn’t work particularly well for me. Other people manage their budget categories by maintaining a spreadsheet, but I have enough trouble keeping up with Quicken. I know I’d fall behind with a spreadsheet.

Capital One 360 savings accounts are the perfect thing for me…they don’t require cash like the envelope system does, and I don’t have to stay on top of one more record-keeping task.

Here’s how I use my accounts.

  • I don’t have savings accounts for budget categories that are monthly and predictable. For instance, I know exactly how much our car insurance and mortgage will be each month, so I just pay those out of our checking account. There’s never a shortfall or an unexpectedly high bill for these expenses, so there’s no need for a savings account.
  • I do use the savings accounts for budget categories that are less predictable or that come up at irregular times. Our electric budget category is a perfect example of this. We budget $200 a month to cover our electric bill. For a number of months each year, though, our bill is less than $200. When that happens, we pay the electric bill out of the $200 allotment and then put the rest into the electricity savings account. In the winter, when our bills are higher than $200 a month, we pay the $200 from our monthly budget and then cover the rest with money from the electricity savings account.

Expenses that come up once a year are easy to manage this way too. Each month we put money into a Christmas savings account and a vacation savings account, and words can’t express how lovely it is to have this money set aside when Christmas and vacation time roll around.

Other budget categories that work well for this type of account are home maintenance, clothing, and taxes (if you’re self-employed and pay quarterly estimated taxes).

If you already have a system that works well for you, you’ll probably want to stick with that, but if you’re like me and can’t seem to make the usual methods work, I’d heartily recommend giving Capital One 360 a try.


How do you keep track of your budget categories? Are you an envelope person, a spreadsheet fan, an online savings account fan like myself, or do you do something altogether different?

disclosure: Capital One 360 links are affiliate links and opening an account through the link will help to support this site. Thank you!


  1. says

    Rats! This post came two days too late… I just opened an ING Direct savings account on Sunday, and would have loved to use you as a referral, for some extra cash for both of us! Oh well. Life goes on.

  2. says

    I have been thinking about doing this. How many savings acounts do they allow you to have? Do you shift the money back into checking when you need it or can you pay directly from a particular ING savings account?

  3. Kristen says

    Bummer, Melissa, esp. for you because you’d have gotten $25!

    Alea, I have 11 or so, I think. I’m not sure if there even IS a limit, but if there is, it’s a pretty high limit! lol And yep, I just shift the money into my checking account when I need to use it.

  4. says

    I use the “envelope method” myself. My husband and I just take $350 per week out in cash and use it to pay for our groceries, gas and any random expense that comes up. We also use that money for fun stuff we want to do. I just use checks to pay for our other bills. Any money we save in a month goes into our money market account.

  5. Wendy says

    We can have “sub” savings accounts at our credit union, so we have 4 savings accounts: one for rainy day savings, one for car/house expenses (repairs/taxes), one for miscellaneous non-monthly expenses (clothing, kids activities, haircuts, etc.), and one for vacation/gifts. We’d like to separate the last one but we can only have 4. It gets tricky pulling $ out of various accounts to cover expenses. Lots of accounting. I also do spreadsheets and log every receipt/expense. I spend hours on this stuff but if it keeps us on track it’s worth the work.

    We have a gas and electric bill, so when I set the budget I combine the two because one is high when the other is low. The problem is that I use last year’s 12-month average plus about 10%, but sometimes that still doesn’t keep up with the rate increases. Used to keep A/C on 72, now it’s 78. And the bills are still higher than previous years :(

  6. says

    Are there minimum amounts for those savings accounts? And to deposit into them, do you mail checks, or just transfer over from your checking? I think you may have said the latter.
    This really sounds like a good plan for me and my house! Thanks SO much! I love your blog!!

  7. says

    I did this at the beginning of the year and route $10 a week into the account. I received a bonus at the beginning but don’t remember how much. I really love ING because it is EASY TO USE!

  8. says

    I love ING but I do things a bit differently. I have my emergency fund in an ING savings account. Then I have an ING electric orange account for my budgeted items. I have a little spreadsheet that keeps track of the categories and amounts. When I get over $800 in the EO account I transfer $500 to the savings account. I have the spreadsheet so I know how much should be in the EO Checking but I can earn a bit more interest. It sounds much more confusing than it is.

  9. says

    Thanks for posting about this! I’ve been very curious about how you manage your money so well and this post has inspired me to give ING a try for a second savings account. I’ll be sure to use your link so that we can both get some extra money!

  10. Diane says

    In Virginia we can set up a budget plan for electric. The amount you pay is based on the previous years average. You pay that amount and at the end of the year it is reavaluated and adjusted for the next year. This way you always know the amount of the electric bill. With some months using less & others more the average takes care of the differences. If the new average is more, you pay the difference in the next years plan. If less, it is credited to next years.

    Is this something you can set up where you live?

  11. Joyce says

    I am in two different credits unions that allow multiple accounts. I have seperate Christmas and Vacation accounts in one.My children attended Catholic schools for years and there would have been no way for me to afford it without having an account to save for it. That money and the money for our house/school taxes (our house is paid off) go into a general checking account there. I have a different one for my “everyday use” in the other credit union. I have a small “Christmas” account in this one too for unexpected expenses, like house repairs. If only I could find a way to save for school clothes. I haven’t figured this out yet. Baby steps.

  12. Lisa says

    I tried to use your link to open an account – and I did open the account, but I didn’t get $25 and I don’t think you got the $10. Not sure what happened, but wanted to let you know I tried!

  13. Kristen says

    Bummer, Lisa! I guess that method doesn’t work. I edited the post to reflect that, and if any of the rest of you would like to be referred, just shoot me an email and I’ll refer you a different way.

  14. Sandy says

    I love your website….I think I’m addicted!

    I have two ING accounts and have for years. I would really like to hear more about ‘HOW’ you budget. I am a sahm and my hubby’s pay just got cut. We have two little ones (ages 3 and 8 mos).

    I was considering using the envelope method, but since I already have the ING accounts, that sounds better….plus you are earning interest.

    Do you have another post that goes a little more indepth?

    Thanks so much for you time and hints. I can’t wait to try your whole wheat bread recipe!

    Sandy :)

  15. says

    My Multiple Savings Accounts
    I would really like to hear more about “HOW’ you budget.I have a different one for my “everyday use” in the other credit union.I love ING but I do things a bit differently.because it given us for some extra cash for both of us!

  16. says

    I use ING along with a local bank and a few other banks (I’m weird but I was always taught to squirrel money away in different spots so that it’s harder for people to then get all of it.) So in order to maintain all of it and view everything, I use

    ING is great, although their rates really aren’t what they used to be but that’s the nature of the Federal Reserve and the government’s crappy monetary policy at the moment more than ING itself. What I love about ING is how much they encourage savings. While one might think that’s the nature of banks, all other banks seem to always want to sell me a credit card or Bill Pay or some other service.

    One good thing to point out, if you ever need to take money out ASAP and can’t wait to transfer it to a local bank first, they give you an ATM card which can be used for Free at the ATMs at Target and (I think) CVS. Don’t quote me on that, though.

  17. says

    I use both systems. My Mom put me onto ING years ago and I use it for a savings plan but I didn’t get specific with different accounts for specific expenses but I can see where it would be great for that.

    I also use the envelope system for my monthly expenses like groceries and spending money. We have a Walmart gas station that is cheaper than everywhere else so instead of having an envelope for gas money I just put that money on a Walmart gift card and use that for gas throughout the month.

    One suggestion I have for your electric bill is getting on the budget plan so your monthly bill is the same year round. That is what I have done for years.

  18. Amanda Y. says

    Yes, I have been doing this at ING since I found out about being able to have multiple savings accounts–it’s wonderful! I have a saving account for every little thing (taxes, future computer fund, vacation, dog expenses, etc.!). We love the budget billing for electric too!

  19. says

    Just got to this post via a link on one of your more recent posts – love your system described here and have enjoyed browsing your site. Keep up the great work.


  20. Darlene C says

    I’m confused. Everytime I tried to budget in categories it was fruitless because if I had an expense in one category I just had to keep shifting the distribution around and ended up spending all the money anyway. If you have it categorized but have an expense you need to spend the money no matter what category it is in. How does it help to set up different categories? Help??

    • Anna says

      We made a “miscellaneous” category and allocate money each month for the unexpected or irregular stuff that comes up (oil change, gifts, extra gas $$, tires, medicines). We were always out of the ordinary things come up and we would put it on the credit card and pay it off the next month, but it would then mess with the next month’s budget. Having some extra money just for that stuff has eliminated most of that and if we don’t use it all we either save it or do something fun as a family with what is left at the end of the month.

    • Kristen says

      That varies SO much, because each family does things a little differently. We put $40/month in our Christmas fund and $130 a month into our vacation fund, but the right amount for you may be more or less.

  21. April in tx says

    I just wanted to say thank you for always having such practical advice and also that we use one savings for Christmas and vacation. We take our vacation in the summer so, from vacation to Christmas, our savings is for Christmas; from Christmas to vacation, our savings is for vacation. I like having one less account to worry about.

    • Kristen says

      Oh, that works out nicely. Isn’t it just so lovely to have the money saved up when vacation and Christmas come around? It makes those two occasions so much less stressful.

  22. Kay Lynn says

    Question…are you constantly moving money back and forth from your ING and checking accounts? I’ve thought about using this approach, but wonder if I would be forgetting to transfer money BACK to the checking account before a major purchase….or even before a smaller purchase that we “save” for, such as clothing, that wasn’t covered in the regular bank account. I would love to hear how you manage this! Thanks!

    • Kristen says

      Well, I would be if I had something like a grocery savings account. But if I buy, say, $50 of clothing, I have enough cushion in my checking account to cover that until I transfer the money.

      For the savings account contributions, I depend on automatic monthly deductions, so that requires no effort on my part aside from the initial setup.


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