I’m a big fan of keeping your personal financial management system as simple as possible. As a widow, you will likely be closing down accounts that were in your spouse’s name and converting joint accounts to your name. It’s a good idea though to keep one joint account open until the entire estate has been settled.
There are times where it pays to add other accounts to your overall plan to make it easier to keep your money straight.
Having only one savings account can make it hard to keep track of how much money you’ve saved for a major purchase like a car, your vacation budget, and an emergency fund. You can use one account, but you’ll need to do some accounting to track how much money you’ve accumulated for each goal.
Sometimes it’s easier to use separate accounts for your various goals. Setting up a distinct savings account for your emergency fund will make it less likely that you’ll dip into if you end up spending extra money on your vacation.
Using automatic transfers from your general account to each savings account will make it easy to be disciplined in allocating your funds to each goal.
If you’re retired and living off your pension and nest egg, you may have some savings accounts that hold high balances but are earning very little. Consider talking to your bank about putting some money into another account that can earn you a better return (money that you know you won’t be touching for a year or more).
Using extra accounts can have benefits, but it can also come with a cost. Talk to your bank about getting the simplest, low fee accounts suited for your purpose. Also check to see if adding an additional account qualifies you for any multi-product rebates or discounts your bank has to offer.
