Want to stick to your budget?: Open two bank accounts

Every month employees get their salary into payroll accounts. They would remit EMIs and use the account for their expenses as well. Instead, a separate account for expenses could be suggested to have a better grip on the expenses.

Hyderabad:A separate account for clearing bills and EMIs is a good option rather than using the payroll account. Soon after your salary is credited into your account you spend that money for EMIs and other expenses, but that creates a lot of confusion as we never how much money we had spent. If we use one account for the money we earn and expenses there will be a chance of losing track of finances as we assume that after seeing the balance amount in the account that all the money is meant to be spent.

Rather, it is better to transfer a certain amount of money from earnings into another savings account. With the advent of internet banking and UPI payments, settling bills has become much easier. So, make it a habit of using another savings account instead of a payroll account to pay insurance premiums and other essential expenses.

Also, it is easy to track the outgoing money if there is a specific account. Firstly, chalk out a monthly expenses budget apart from investments and EMIs. Then transfer the said amount from the payroll account to another account. Do not withdraw the remaining amount from the payroll account under any circumstances. By doing so, it will enhance your savings each month. This amount should be used only for emergency purposes.

And also using internet banking and debit cards can fetch reward points and cashback. Check which one of your accounts is earning such extra bucks. For instance, if the debit card of the payroll account gives more benefits then continue utilising it to that extent.

Then transfer the remaining amount to the second account. Many banks pay the same rate of interest for payroll as well for savings accounts. While some banks pay less for payroll accounts. Nowadays, some banks are paying a slightly higher rate of interest for a savings account. Select such banks and open a savings account. Arrangements should be made to transfer the remaining amount to a fixed deposit by the end of the month. Flexi deposit accounts are useful for this.

Read:IT tips: Don't wait till last minute, opt for tax-saving schemes now