As a professional organizer, I’m sometimes asked how many of a certain thing a person should have. My standard response is, “As many as you need and no more.” The same holds true for the number of bank accounts and credit cards you should have. The more you have, the more complicated YNAB becomes.
Many people come to YNAB with multiple bank accounts because they use their bank accounts as a way to allocate their money. A Christmas account, a vacation account, an account just for their bills, etc. Often they’ll have a savings account just for Savings. And they might have automatic transfers from their paycheck into the savings account.
With YNAB those efforts are unnecessary. When you’re on the YNAB train, you can make all those allocations into categories so you don’t need multiple accounts for multiple purposes. You might want a savings account so you can earn interest on your money. But the money in the savings accounts will be distributed into your categories.
In YNAB, your accounts simply indicate the location of your money. The budget/spending plan indicates the jobs of all your money (checking and savings alike). So you might as well minimize the number of locations you have to keep track of.
Many of us also have multiple credit cards. Some people are playing the credit-card rewards game, which can pay off as long as you’re on top of it. (For me, personally, it would take more time and attention than I want to give.) Others are juggling multiple cards because they’ve taken advantage of introductory offers.
In my opinion, the ideal is to have one checking account and one high-yield savings account (HYSA) and just one credit card. In my personal budget, I have a checking account and a high-yield savings account. It keeps YNAB simple. The only complexity is that I have to pay attention to upcoming bills so I know if I need to transfer money from the HYSA to the checking account.
But credit cards are another story for me. I have four credit cards, two of which are used regularly. One is the Chase Amazon Prime card, used only for Amazon and Whole Foods purchases to get the 5% bonus. The other is a Chase Freedom card, which we use for everything else. Earlier this year, I got a 0% Capital One Quicksilver card when we were renovating our house to sell it. (I paid it off when we sold the house.) I also have a rarely used Discover Card that was my very first credit card. I’ve had it since the 80s and its longevity enhances my credit score. I use it occasionally just to keep it from going dormant. (As with all my credit cards, I have the statement balance on autopay so I don’t forget to pay it when I use it.) None of these credit cards has an annual fee.
In my case, I have three extra cards for a reason. You may have multiple cards or bank accounts for a reason as well.
I encourage you to take a look at the number of bank accounts and credit cards you have in your budget (and in your life). Do you need all of them? Can you ditch any that have annual fees? If you carry a balance on multiple cards, you might consider closing cards after you pay them off (or doing a balance transfer to a low-interest card and ditching the ones you pay off).
Bottom line: In my opinion, the fewer accounts you have the better, unless there’s a reason you need more. My motto in life is “Let it be easy.” Having fewer bank accounts and fewer credit cards makes life easier.
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