43 | Why So Many Bank Accounts?

Any time I see a bunch of bank accounts within a single household...

I cringe a little bit.

Yes, I understand the mindset of segregating money for a specific goal from everything else.

I see how having separate accounts in a relationship could allow spending to happen seamlessly without a value judgment being placed on each purchase.

I also know that a business owner needs to keep the business finances separate from personal finances.

Certainly there are other advantages that I am not listing.

I can buy into each of these advantages if they are done with clear intention, but it also doesn't have to be this hard.

The number of disadvantages to allowing your list of accounts to grow without pruning seem infinite and hard to measure from a psychological perspective.

When everything comes into one place, and everything goes out of one place, it makes it a lot easier to do something that is important in finances...

Keep track of how much is coming in and how much is going out.

This sounds so simple, but it's so easy to overlook.

When funds are spread across a bunch of different accounts…

It's a lot harder to keep track of what is real income and what's a transfer between your own accounts.

It's close to impossible for the average person to keep tabs on where dollars are being spent.

It's a lot easier for things to run on autopilot for many months or years longer than they were intended to run in the first place.

It's a lot easier to panic when an account balance gets low even though your collective account balances are more than enough.

When it comes to the number of accounts, "Less is more!".