Between your bills, savings, and necessary daily spending, it can be difficult to decide which should take precedence, especially when you’re living by yourself for the first time. Many Filipinos managing their first jobs may struggle to track where their money goes each month, which can lead to overspending, missed payments, or stalled financial goals. Worse, many of them do not get out of these habits as they progress through their careers.
There are many ways to approach this money management dilemma, but most qualified financial experts will probably recommend that you maintain separate savings accounts based on their purposes. If you’re just using the same bank and the same savings deposit offering, using distinct accounts for bills, spending, and savings may not necessarily earn you more interest directly. However, what it does do is create clarity and mental separation that you need to effectively manage your nascent financial life.
If you’re just starting out, learning how to open a bank account at the right bank is the first step toward building a system that works. A trusted digital-first bank like Maya Bank that lets you create multiple savings buckets under one main deposit account, through its signature Maya Personal Goals feature, is perfect for segregating your funds, as it does away with the need to juggle multiple accounts at this stage of your financial journey.
In any case, whether you opt for multiple savings accounts across different banks or choose one bank that lets you designate sub-accounts, you’ll achieve the goal separation you need. From there, you can adopt more complex strategies that keep your bills paid, your spending in check, and your savings growing. Here’s how you do it:
1) Create a Bills Account
The first step is to dedicate one account solely for fixed expenses, like rent, utilities, subscriptions, and loan payments. Ideally, this should be a subaccount under your main deposit account so you can avoid transfer fees for this critical area.
In any case, deposit the full amount needed for all recurring bills at the start of the month. This ensures you never accidentally spend money earmarked for essentials. If you get a credit card to facilitate bill payments, make sure you are paying off your credit card with funds from this account.
2) Maintain One Savings Account, to Start
A dedicated savings account is crucial for long-term goals or emergency funds, which means it should take precedence over discretionary spending. Ideally, you’ll want to treat this account as untouchable except for pre-planned withdrawals. Make a habit of transferring funds right after your salary arrives so that you can grow your savings more consistently. Later on, you may want to create even more savings accounts to manage big-ticket expenses such as tuition fees or a down payment on a home.
3) Open a Daily Discretionary Spending Account
Next, set up an account for your day-to-day expenses, such as groceries, transport, dining out, and your occasional treats. If you have a payroll savings account from your employer, this can be used for this purpose. But if you want a clearer view of your finances, you may want to open another deposit account from the same bank that manages your billing and savings accounts. If so, transfer funds left over after your bills and savings commitments into this account every salary date or, if you’re self-employed, weekly or monthly.
Having a separate account for discretionary spending discourages irresponsible spending, as you are introducing a hard limit to the equation. Anything left over at the end of the month can be added to your savings or rolled over into the next period, if you’re interested in purchasing a big-ticket item.
4) Use Digital Banking Features to Track, Manage, and Protect Your Money
With at least three accounts to manage, regular in-person bank visits aren’t going to be a good use of your time. Thankfully, the best digital banks tend to offer easy-to-use mobile apps that simplify the management of multiple accounts, including for services other than savings deposits, like investments, credit cards, time deposits, and so on. With everything in one app, there’s little need for tedious manual tracking, and you should be able to see where your money is at a glance.
Now that you have all this convenience literally under your fingertips, it’s important to monitor your spending patterns fairly regularly. Review your transactions monthly to identify areas where you might be overspending or under-saving, then adjust the amounts you allocate appropriately.
5) Aim to Reshape Your Habits
Schedule regular transfers for bills and savings, and use your phone’s alarms so you don’t forget to deposit funds in the right places. Consistent payments over time can become second nature, and you’ll soon find that your finances are consistently organized and predictable.
6) Avoid Overcomplicating Your System
It can make sense to open an account for different categories, but simplicity usually works best early in your financial journey. Too many accounts too soon can create confusion and result in an unnecessary waste of time. For now, stick to a manageable system that has one account for bills, one for discretionary spending, and one for your emergency funds, and a maximum of two for different critical saving categories that you’ll only open when the emergency funds are in order.
It’s Time to Split
However you decide to split your funds, starting with a digital bank can help turn your early account segregation project into a long-term success. These emerging financial institutions often provide simple yet secure account setups as well as clear, multi-account tracking that makes things even easier. Once your accounts are organized, you’ll likely find it much easier to manage everyday expenses without impacting your savings or forcing last-minute loans to cover your bills.
