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

Capital One 360 logo.

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 Capital One 360.

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 as the envelope system does, and I don’t have to stay on top of one more record-keeping task.

A glass jar of coins.

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 this method 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?


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Kay Lynn

Friday 14th of March 2014

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!


Friday 14th of March 2014

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.

April in tx

Friday 29th of November 2013

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.


Friday 29th of November 2013

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.


Monday 1st of July 2013

How much does the average family set aside every month for family vacation and Christmas?


Monday 1st of July 2013

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.

Monique DiCarlo

Tuesday 18th of October 2011

I was wondering if you use the special ING kids college savings account that they have, or do you put money for education in a regular account for them?

Darlene C

Monday 17th of January 2011

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??


Monday 17th of January 2011

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.

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