How Many Bank Accounts Do I Really Need?

The Ramsey Show Highlights
5 Feb 202205:24

Summary

TLDRIn this engaging conversation, John discusses his plans for combining finances with his fiancΓ©e post-marriage. The host, Dave Ramsey, commends John's proactive approach and shares his own experience, advocating for simplicity by recommending a central account with sub-accounts for different financial goals. Dave emphasizes the importance of having a unified financial strategy and suggests using a single financial planner for both partners to ensure shared understanding and language. The discussion also touches on the benefits of high-yield savings accounts and the importance of keeping things straightforward to avoid complexity in financial management.

Takeaways

  • πŸ’ John and his fiancΓ©e are planning to combine finances after their marriage in August.
  • πŸ“Š They want advice on how many bank accounts they should have to manage their financial goals.
  • πŸ‘ John is praised for being proactive and planning their financial future early.
  • πŸ’‘ Initially, John had multiple bank accounts for different purposes, which became a complicated mess.
  • 🏦 The recommendation is to have one central account with sub-accounts for different savings goals.
  • πŸ’» Keeping the emergency fund in a separate online high-yield savings account is a good strategy.
  • 🏝️ Having separate savings accounts for specific goals like vacation and car upgrades helps in tracking funds.
  • πŸ” Avoid over-complicating by having too many accounts; simplicity is key.
  • πŸ‘₯ Using the same financial advisor for both partners can provide consistent advice and help in achieving common goals.
  • πŸ’¬ Communication and simplicity in financial planning are crucial for a successful marriage and financial future.

Q & A

  • What is John's main concern regarding his upcoming marriage?

    -John is concerned about how to combine and manage his and his fiance's finances after they get married.

  • What advice does Dave Ramsey give for managing finances as a newly married couple?

    -Dave Ramsey suggests having one central account with sub-accounts for different financial goals, such as savings, emergency fund, and lagging fund.

  • Why did Dave Ramsey initially have multiple bank accounts?

    -Dave initially thought having multiple bank accounts for different purposes would make things simple and organized, but it ended up creating a mess.

  • What is the purpose of sub-accounts within the central account according to Dave?

    -Sub-accounts within the central account are used to categorize and manage different financial goals, such as saving for a car or an emergency fund.

  • What does Chris suggest for the emergency fund?

    -Chris recommends keeping the emergency fund in a separate online high-yield savings account.

  • How does Chris differentiate between different savings goals in his account?

    -Chris uses multiple sub-accounts within one account to separate funds for syncing, vacation, car upgrades, and other goals.

  • What is the recommendation for managing Roth IRA accounts after marriage?

    -Dave suggests keeping it simple and having the same financial advisor for both accounts to ensure both partners are working towards the same financial goals.

  • Why is it important to have the same financial advisor for both partners?

    -Having the same financial advisor ensures both partners are receiving the same advice and can communicate effectively about their financial goals.

  • What is the general theme of financial advice given by Dave and Chris in the script?

    -The general theme is to keep finances as simple as possible, avoid complexity, and maintain clear communication between partners.

  • What is the purpose of having a separate high-yield savings account for the emergency fund?

    -A separate high-yield savings account can provide better interest rates, helping the emergency fund grow while still being easily accessible in case of need.

  • How does the script suggest couples approach financial planning after marriage?

    -The script suggests that couples should approach financial planning with simplicity, using a centralized account system with sub-accounts for different goals, and ensuring both partners are on the same page with the same financial advisor.

Outlines

00:00

πŸ€΅πŸ‘° Financial Planning for Newlyweds

In this segment, John, a soon-to-be-married individual, joins the show to discuss financial planning with his fiancee. John is looking for advice on managing finances post-marriage, particularly regarding the number of bank accounts they should maintain. The host commends John for his proactive approach and shares his own experience, which evolved from having multiple bank accounts to consolidating into one central account with sub-accounts for different savings goals. The advice given is to keep things simple and not to overcomplicate the financial setup. The conversation also touches on the idea of having separate or joint financial advisors and the importance of unified financial planning and communication in a marriage.

05:01

🏦 Streamlining Finances with Sub-Accounts

This paragraph delves deeper into the strategy of managing finances through a single central account with multiple sub-accounts. The host emphasizes the importance of simplicity, suggesting that having a checking account and a savings account is a good start. He also mentions the benefit of using an online high-yield savings account for the emergency fund to earn a higher interest rate. The discussion highlights the advantage of keeping all financial activities within the same banking institution to avoid dealing with multiple banks and to clearly separate funds for different purposes, such as sinking funds for large purchases like cars or vacations.

Mindmap

Keywords

πŸ’‘finances

Finances refer to the management of money and include budgeting, saving, and investing. In the video's theme, it's central to the couple's planning for their future together. The script mentions combining finances and managing financial goals as a key part of their pre-marital planning.

πŸ’‘bank accounts

Bank accounts are financial accounts maintained at a bank or other financial institution, used to hold money. The video discusses the number and types of bank accounts a couple should have, emphasizing the importance of simplicity and organization in managing their finances.

πŸ’‘financial goals

Financial goals are objectives related to an individual's or couple's financial planning, such as saving for a car, a house, or retirement. The video script talks about setting up accounts to manage and achieve these goals, like a car upgrade fund or a vacation fund.

πŸ’‘emergency fund

An emergency fund is money set aside to cover unexpected expenses or financial hardships. In the script, it's mentioned as one of the sub-accounts within the central account, highlighting its importance in personal finance planning.

πŸ’‘savings account

A savings account is a deposit account held at a financial institution that allows money to be saved and withdrawn. The video suggests having a savings account as part of the couple's financial setup, possibly with sub-accounts for different savings goals.

πŸ’‘high-yield savings account

A high-yield savings account offers a higher interest rate than a regular savings account, making it a more profitable place to store money. The script refers to keeping an emergency fund in such an account for better interest gains.

πŸ’‘Roth IRA

A Roth IRA is a retirement savings account in the United States that provides tax advantages. The video discusses whether couples should keep their individual retirement accounts separate or combine them after marriage.

πŸ’‘financial advisor

A financial advisor is a professional who provides guidance and advice on financial matters. The script suggests that couples should consider having the same financial advisor to ensure they are working towards the same financial goals and have a unified financial strategy.

πŸ’‘streamlining

Streamlining refers to the process of making something more efficient and less complicated. In the context of the video, it's about simplifying financial management by having fewer bank accounts and a more organized approach to finances.

πŸ’‘sinking fund

A sinking fund is a separate account used to save money for a specific purpose, such as a large purchase. The video mentions creating sinking funds for goals like buying a car, illustrating a strategy for saving towards specific financial objectives.

πŸ’‘simplicity

Simplicity in this context means making the financial planning process as straightforward and uncomplicated as possible. The video emphasizes the value of simplicity in managing finances, advising against over-complicating the couple's financial setup.

Highlights

John and his fiance are planning to combine finances before their marriage in August.

The couple is interested in managing their financial goals and growth.

John is praised for mapping out a financial plan early in the marriage.

Both John and his fiance are into numbers and are excited about financial planning.

Initially, Dave had multiple bank accounts for different purposes, which he later found to be a mess.

Dave now recommends having one central account with sub-accounts for different savings goals.

Sub-accounts can be created for emergency funds, lagging funds, and sinking funds for specific purchases.

Keeping all accounts in one place simplifies management and visibility.

John keeps an emergency fund in a separate high-yield savings account.

For other banking needs, John uses a local brick and mortar bank.

Having multiple savings accounts within one bank helps separate funds for different purposes.

It's recommended not to over-complicate finances with too many accounts.

The advent of online banking has made it easier to manage multiple accounts.

John and his fiance plan to close or add names to their individual college accounts.

Streamlining finances into one place is suggested for simplicity.

Roth IRAs are individual retirement accounts and can remain separate.

It's recommended for couples to have the same financial advisor for unified financial planning.

Keeping finances simple and unified helps avoid confusion and promotes cooperation.

Transcripts

play00:00

foreign

play00:04

John joins us in San Diego California

play00:07

John welcome to the Ramsay show

play00:10

hey thanks you guys for having me today

play00:12

honor to speak with you and your

play00:13

listeners thank you how can we help

play00:16

yeah so just a question for you guys my

play00:18

fiance and I are getting married uh in

play00:21

August cool congrats and drafting up uh

play00:24

thank you guys you know we've been

play00:25

drafting up a kind of a plan to combine

play00:27

our finances once we get married and

play00:30

obviously we'll do our day-to-day

play00:31

checking account but beyond that you

play00:34

know I was curious what what you guys

play00:36

teach I was looking for a video that

play00:37

Dave was talking about this and couldn't

play00:39

find one

play00:40

um how many other bank accounts should

play00:42

we have open or do you recommend that we

play00:45

have open to just kind of manage our

play00:47

financial goals and grow up the baby

play00:49

steps I'm just curious to get your

play00:50

thoughts first of all John you're a stud

play00:52

the fact that you're trying to map out a

play00:53

plan for this already I mean I feel like

play00:56

this marriage is already off uh to a

play00:58

good start John well you know dirt's

play01:01

attract I think we both are into numbers

play01:03

and maths and we're both very excited to

play01:06

do this and you're both on board with

play01:07

the Ramsay plan

play01:11

all right John so I'm going to tell you

play01:13

what I did in my marriage okay okay

play01:15

great the first time same marriage what

play01:19

I was gonna say clarify John clarify and

play01:20

then after we were married for a while

play01:23

I'll tell you what what happens now okay

play01:25

when we first got married

play01:29

let's be honest I was a genius and by

play01:31

genius I mean I was an idiot and I had

play01:34

an account for savings I went to One

play01:37

bank then I went to another bank for our

play01:40

checking account where our paychecks

play01:42

were deposited I had another bank for

play01:44

like a side hustle account I I ended up

play01:47

with bank accounts everywhere and I

play01:50

thought what I was doing was making

play01:52

things very simple and cut and dry I

play01:54

would always know where this was and

play01:55

that was never what I made was a huge

play01:59

mess a giant idiotic mess

play02:03

and so now we have one account a one

play02:08

Central account and in it we have sub

play02:12

accounts there one might be a savings

play02:14

account one as our emergency fund one is

play02:17

a lagging fund because the way we get

play02:18

paid here at Ramsey Solutions so I will

play02:20

dump money into that one and hold it so

play02:22

I can pay some my continue to pay my

play02:24

house off and things like that but I

play02:26

create we create sub accounts and then

play02:28

if we want to have a sinking fund to

play02:29

save up for a car we created another one

play02:31

and dumped money to that one so it all

play02:33

stays in the same place we can see it

play02:34

with the same account it goes on the

play02:35

same every dollar app we don't have to

play02:37

deal with 50 different banks that's my

play02:39

recommendation yeah that's a good word

play02:41

there and I'll tell you what I do John I

play02:43

keep our emergency fund in a separate

play02:45

online high-yield savings account and

play02:48

then we do all of our other banking with

play02:50

a local brick and mortar uh here in town

play02:52

and we have a checking account and then

play02:55

we have our savings accounts and like

play02:56

John said you can have multiple we have

play02:58

one for syncing funds we have one for

play03:00

vacation we have one for the car upgrade

play03:02

fund and at doesn't complicate things

play03:04

but what it does when it's in one

play03:05

account it helps you separate what's for

play03:07

what right because you have one giant

play03:09

savings account you go well how much of

play03:10

this for the car and how much of this

play03:11

for emergencies and what's for vacations

play03:13

and so you can make as many as accounts

play03:15

as you want but like John did don't over

play03:17

complicate it

play03:19

if you have 15 accounts it may get a

play03:21

little hairy so I was go I would say

play03:23

have as few as possible while still

play03:24

accomplishing your goals

play03:26

yeah because you know with all the

play03:27

Advent of online banking I mean there's

play03:29

so many ways to check a million

play03:30

different banking apps and she and I

play03:32

have like several Credit Union accounts

play03:34

that we've individually had open since

play03:36

we're both in college obviously we'll

play03:38

close those or add each other's names

play03:40

soon but I like the idea of just

play03:42

streamlining it so that it's all in one

play03:45

place does this also go for like

play03:46

obviously our Roth IRA is going to stay

play03:48

independent well you know because it's

play03:50

an individual retirement account

play03:52

um do you guys recommend that when

play03:54

couples get married if they have the

play03:56

exact same financial advisor for both of

play03:59

those accounts or you know she and I

play04:00

obviously before we met at different

play04:02

financial advisors for those so

play04:05

um what do you guys recommend for those

play04:06

kinds of accounts

play04:08

see who does better you'll have a death

play04:10

match and you see which one you pick I'm

play04:12

just kidding yeah hey keep just let this

play04:15

be as y'all start your marriage

play04:17

let this let the word simple distill

play04:21

every one of your decisions what's the

play04:22

simplest way we can do this right now

play04:25

the world is selling us complexity the

play04:28

world is selling us you need to be doing

play04:29

this if you're not doing that you should

play04:30

be doing that and why why oh you're in

play04:32

the world is telling us individualism

play04:33

which is how dare you

play04:36

communicate with somebody else about

play04:37

their financial goals that's hers well

play04:39

she's my wife I don't care that's her

play04:40

goals your goals

play04:42

simple simple simple

play04:45

um I yeah I recommend having the same

play04:47

financial planner that's so great I

play04:48

don't want to get different advice that

play04:49

my wife's getting and we're gonna we're

play04:51

both working together towards the same

play04:53

Financial goal and I want you in the

play04:55

room at the same time talking to that

play04:56

person right so that you both have the

play04:58

same language and understanding versus

play04:59

well my financial advisor told me to do

play05:01

this they told you told me to do that so

play05:03

I would keep it simple like John's

play05:04

saying stick to that checking account a

play05:06

savings account and if you want to keep

play05:08

it separate because that makes me not

play05:10

touch the Cookie Jar when it's over here

play05:11

in this online account uh I like that

play05:13

and you sometimes will get a higher

play05:15

interest right now I'm at like one

play05:16

percent which is amazing in the world of

play05:18

a savings account crushing the game uh

play05:20

but again it's not there to make you

play05:22

money it's there to protect you

Rate This
β˜…
β˜…
β˜…
β˜…
β˜…

5.0 / 5 (0 votes)

Related Tags
Financial PlanningMarriage AdviceBudgeting TipsSaving StrategiesMoney ManagementCouples FinancesInvestment GuidanceRetirement PlanningEmergency FundFinancial Goals