How to Use High Interest Savings Accounts in Your Family Budget
High interest savings accounts are an important part of keeping your family budget under control. And they are particularly helpful for dealing with your irregular expenses.
By ccard123, eHow Member 
High interest savings accounts are an important part of keeping your family budget under control. And they are particularly helpful for dealing with your irregular expenses. High interest savings accounts are available at many banks, but I will use the example of ING direct bank, because they offer an internet savings account with good rates and they are easy to use, but you can use any online bank. Most online banks also allow customers to set up multiple high interest savings accounts for free, which is an important part of the family budget plan that I am about to describe.
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Instructions
Step1
In order to decide how many high interest savings accounts you need, first make a list of your irregular expenses. For example, you buy clothing every year, but not at the exact same time every year. Gifts are another expense that fall into this category; I buy gifts for people every year, but not every month. The number of categories you come up with is the number of high interest savings accounts you should create. Name each account with its category name. Remember they are all free so you can create as many savings accounts as you need.
Step2
Now for each of your categories, estimate how much you spend in a given year on that category. Rough estimates are fine, you'll be able to adjust them any time. Now divide the yearly number for each category by 12 to give you the amount of money that you should add monthly to each of your online savings accounts. So, if you estimate that you spend $1,200 on gifts every year, it means that you should set your internet savings account to automatically draw $100 from your checking account every month. Now, whenever you need to buy gifts, you can withdraw the money from your gifts account and it won't bust your monthly family budget.
Step3
The added bonus of using this method is that, since you are adding to the internet savings account each month, instead of leaving the money in your checking account, you are constantly earning a high interest rate on the money that you are not using. It adds up over time; give it a try!
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Tips & Warnings
- If you use this method effectively, you will get a better sense of how much leftover money you can afford to spend each month.
- This method helps to smooth out your finances so that you don't have to use your credit card and rack up serious debt every time you need to buy a new outfit for work.
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