Managing money from one account makes is confusing. We all have done it and we know that having just one account to receive the salary, pay all your bills, and invest in markets makes your account left with no balance at the end of the month. Right? So, you need to make a few changes in managing the money, so that you grow confident with money by setting aside the right amount for saving, expenses, and investments.
You need to have multiple accounts to make things easy. This will help in budgeting and keeping track of where your money goes. Now you may ask - “So what types of account should I really have then?”. Don’t worry we have got you covered in this blog. Let's get started.
You will require :
1 Primary Savings Account which acts as a master account.
1 Savings Account for having emergency funds.
1 Expense Account.
1-2 Credit Cards. (Suggested only if you're good with taking credits)
1 Business Current Account (If you're a freelancer or have a small business running)
1. Primary Savings Account
This is the main account in which you receive your salary. Consider it a master account from where you shift your money to other expenses and investment accounts. You need to have the money parked in here to earn some interest on the money. But the interest isn’t that lucrative to keep huge sums of money.
You can use any Commercial Bank account for this case.
2. Emergency Savings Account
This is the account that will save you on rainy days and keep you secure. You must have money equivalent to 4-6 months' salary as your emergency fund. Since keeping the emergency fund in a savings account isn’t much beneficial, you can keep the money in liquid funds which provide better returns as well as the flexibility to withdraw. Make sure you link this account with the liquid funds account to keep all your information regarding emergency savings at one place.
You can use Groww app to invest in liquid funds.
3. Primary Expense Account
This is the account that lets you segregate your daily expenses which you are unable to keep track of if you use a saving account for expenses. By using this account you avoid the temptation of spending more and stay within the budgets. It’s like saving yourself from your bad habits. Setting money aside for your expenses automatically lets you save more which is a good way to keep yourself covered during the bad times.
You can count on Zerobalance for all your expenses. Create an account with us and get a Virtual card that you can use for all your online expenditures. We help you with budgeting your money for all the categories you spend in. Select categories, and apps and set limits on them to never overspend again. Whenever you cross your set limits, we decline the transactions for you and keep you stay within the budget. Amazing right? Also having a separate expense account with us keeps your primary savings account safe from the loss of huge sums of money in case of any fraud or online mishap.
4. Credit Cards
It would be completely wrong to say that you shouldn't have a credit card. You definitely should own credit cards, after all, you shouldn't miss out on the exciting rewards and bounty these cards give. Our suggestion would be to use credit cards for high-ticket purchases where you can enjoy much needed offers. But make sure you don't use it for day-to-day expenses. Using credit cards for daily purchases might increase your tendency to spend. (For daily expenses you have your expense account. )
You can use cards like slice or unicards to get credit for items purchased and can pay it over 3 installments.
5. Business Current Account (If you’re a freelancer or have a small business)
Being a freelancer or having a small business running will obviously require you to keep a track of your inflows and outflows. You must have a separate current account which you can use to pay and receive money. This usually helps you keep your business income
separate from your personal expenses. Each month you can check the profits statement and portion some money out of it for reinvestment into the business/work, remaining you can send to the Primary Savings Account.
You can use Business Current Account with OPEN Neobank or Razorpay which provides you the seamless digital experience that you require.
There you go, now you know how many types of accounts you can have to have your money life sorted. But do remember we do not claim that this might be the right setup for you, that's something you need to decide for yourself. However, we do take the guarantee to sort your expenses if you Join Zerobalance.