OFWs, whether remitting or saving money for the future will need to deal with bank accounts wherever they may be in the world. Having an account or several of these in a bank can be a challenge for those who need to budget their funds effectively.
Opening accounts with several banks has its perks since each bank offers unique benefits depending on the type of account you want to use. In this post, we will share some tips on how you can better manage your finances if you have multiple bank accounts. Read below…
[Guide] Here are 4 Tips to Manage Your Bank Accounts More Effectively
To begin, we want to be clear that having multiple bank accounts is not the problem. It is a matter of organization and good management.
Bank accounts are generally helpful if we are dealing with money that could be allotted for our monthly recurring overhead, the children’s education, or our family’s emergency fund.
Here are four easy-to-do tips to get your fund management as organized as it can get:
- Identify your priority funds to keep.
As we’ve said, opening several bank accounts for different goals isn’t necessarily a wrong thing. However, we should always stick closely to our goals for opening each. Remember to consider which ones we need to have a separate account for.
That said, the general rule is to open bank accounts for funds you only need. Following this principle, we can narrow down our focus on at least two bank accounts: a Savings Account that will cover home and family needs and an Emergency Fund, since these two are the basic ones that would cover everything we need in the immediate future. Also, having a checking account has its benefits, especially if you have lenders who prefer checks as a mode of payment. Otherwise, having the basic two account types would cover everything we need.
Meanwhile, those who have an existing home loan with a bank, which is set to Automatic Debit Arrangement, can use a separate bank account for this kind of purpose. However, before doing so, make sure that you are well-informed of your payment options if you don’t like opening additional accounts.
Remember, keeping only the bank accounts that you have a specific use for is the main goal here.
- Choose the bank that best suits your needs.
The most important consideration when choosing a bank to work with is the amount of convenience they can offer you. In this regard, making fund transfers between accounts will become so much easier since they’re both enrolled under one bank.
Another thing to consider is if your chosen bank offers competitive and friendly rates.
The only way to find out is to compare banks and to evaluate their accounts facility. And for those working overseas, it is highly advisable to choose banks with overseas branches as well.
Remember to inquire about the interest rate earned, minimum maintaining balance, penalty charges, and perks for OFWs when doing so. The government imposes taxes, so be sure to look out for that, as well.
Furthermore, spreading your funds across several banks allow each account to benefit from different perks. Of note, the PDIC has set a PHP 500,000 maximum coverage per depositor in case the affiliated bank goes bankrupt, which may or may not happen. However, if any of these features are insignificant that you really won’t notice the difference, then you can just work with one or two banks, at the very least.
- Always deposit your funds accordingly.
Once you have successfully decided which banks to go with or which accounts to keep, you need to develop the habit of regularly depositing money on your active accounts. Even if you could transfer money online, the goal of having multiple accounts is to enable you to budget and allocate your expenses accordingly based on your financial needs and goals.
- Maximize online banking.
The good thing about modern technology is that we can now fully integrate it into our regular activities such as funds management and banking.
Online banking allows us to check our balance, transfer cash from one account to another, and make payments. Of note, we will also be able to see every transaction made when we use our bank’s online facilities, as well.
This is especially useful for those working overseas because it will make it easier and more convenient for them to check which account needs to be prioritized or funded right away.
When talking about budgeting or fund management in general, the most important thing to consider is your priorities and financial goals. By using your accounts to optimize the way you handle your funds, you can be sure that you will be on your way to achieving your financial goals in no time.
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