How many bank accounts should you have? An expert says 4 is the magic number (2024)

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• An expert recommends having four bank accounts for budgeting and building wealth.
• Open two checking accounts, one for bills and one for spending money.
• Have a savings account for your emergency fund, then a second account for other savings goals.
• See Business Insider's picks for the best high-yield savings accounts »

How many bank accounts should you have?

Personal finance expert and author Tiffany "The Budgetnista" Aliche believes the answer is actually pretty simple. She spoke at OneUnited OneTransaction, a conference about closing the racial wealth gap, about her best budgeting tips.

"There's really a four bucket system," Aliche said. "And those buckets are checking, checking, savings, savings."

1. Checking account for bills

First, set up a checking account to pay your bills, Aliche said. Whether it's your own account or a joint bank account, you'll use the money in this account to pay for housing, utilities, insurance, your car loan — any bill you have to pay.

Aliche recommended that you do not get a debit card for this account. This way, you won't be tempted to spend your bills money on other things. When you want to spend money, you can use your second checking account.

2. Checking account for other expenses

This checking account is for everything other than your bills. You could use it for entertainment, meals at restaurants, or gifts for friends and family.

Go ahead and attach your debit card to this account, because the money is primarily for spending.

3. Savings account for your emergency fund

An emergency fund is money you only use when the unexpected happens. Maybe you lose your job, or your car breaks down, or you receive a huge hospital bill. You only touch this money if there is an emergency, so it's wise to keep it in an account that's separate from the ones you use for bills or other savings goals.

Most experts recommend setting aside three to six months of necessary expenses in your emergency fund. The rule of thumb is that you should have six months' expenses if you are a one-income household and three months' expenses in a two-income household. High-yield savings accounts tend to offer the highest rates on your money, so they could be a good option to consider.

4. Savings account for other goals

Finally, there's an account for other big savings goals. You might use this account to stash away money to buy a car, make a down payment on a home, pay for your wedding, or set up savings for a child.

If you use a bank that makes it easy to save for separate goals, you could even create individual savings buckets for each goal in one account. This makes it easier to track how much money you have set aside for each purchase.

How to manage these 4 bank accounts

Aliche called her budgeting method "split it before you get it." If you receive direct deposits, ask your employer to put a certain percentage or dollar amount of your paychecks into each of these four accounts.

For example, you might put 35% of your paycheck into your bills checking account, 20% into your spending account, 20% into your emergency fund, and 15% into your second savings account.

By splitting up your paycheck before it hits your bank account, you won't be tempted to spend money you don't have. You'll also consistently work toward your savings goals without even thinking about it.

To split it before you get it, you'll need to do the math beforehand. Figure out how much you put toward all of your bills each month, what you need in an emergency fund, how much you'll need for a big purchase, and how much you have left over.

If your employer can't divvy up your paycheck for you, Aliche said there's a simple solution: Ask them to deposit the full paycheck into your bills checking account. Then you can set up the transfers yourself. Your bank probably has a tool for setting up recurring transfers each time you get paid so that you don't have to remember every time.

Aliche said this four-bank-account system is a low-effort, effective way to budget.