Last week, a wrote an article about why you should open a High Yield Savings Account (HYSA). Read it here. 

I recommend you check out that post because it contains many gold nuggets—but if you don’t have the time, here’s the tdlr version (stands for too long; didn’t read or in other words, the short version): 

Open a High Yield Savings Account and make more money from your savings. 

In the article, I also go more in-depth about the pros and cons of banking with online and brick-and-mortar banks.

In this post, I want to share with you why I separate my savings and checking accounts. I want to share this story because although it may seem obvious, too many people fall victim to the scenario I will share below. 

The goal of this post is to convince you to separate your savings account from your checking account.

Choose What’s Best For You

You can choose what types of banks you do business with, whether that is online or brick-and-mortar banks because it’s your money and you should do what you want with it—you can even do business with both.

That’s the strategy I’m using.

I bank with my local federal credit union and besides the mandatory member savings account, I only have my checking accounts here. 

Since I withdraw and move money back and forth so much in my checking account, having this at my local federal credit union was the most ideal scenario. After all, if I have questions or disputes with my transactions, I can always stop by the local branch and ask for 1 on 1 assistance.

Other than that, though, my savings and investment accounts are all done online.

Why You Should Separate Your Savings From Your Checking 

The number one reason why I put my savings and checking in two separate places is that putting my money into a savings account actually discourages me from accessing that money. Here’s how my reasoning works:

First of all, what is a savings account?

It’s a place where I save my money.

Why do I want to save money?

So I can have a better life, duh!

And to do that, I need to put my money in a place where it’s going to be harder for me to reach. Between the hassle of having to transfer money back and forth between the two different banks and waiting 3-5 days for the money to appear, I’d rather just leave the money alone. 

Take My Friend As an Example

I had a friend who did all his banking at the same place. Wherever he was short on money in his checking account, he would go into his savings account and transfer money from there to his personal checking account to pay for his expenses.

He had roughly $5,000 in his savings account but in a matter of months, it went to $1,000. Self-discipline is just as important as anything else, but I think being able to access his money from the same location made it super convenient to transfer money back and forth. 

That in turn caused him to tap into his savings account when he should not be touching that money at all.

Too often, people fall victim to this…trap. I want to make sure you don’t fall victim to this same situation. 

That said, if there’s too much in this article and you still don’t understand the point that I’m trying to make, here’s the tdlr version: Separate your savings from your checking accounts! Open your savings at a bank account that is separate from your checking account. This way, you’re not tempted to touch your savings whenever it conveniences you!

So, what are your thoughts? Do you currently bank with a brick-and-mortar bank, an online bank, or a combo of both? I’d love to know so comment below!