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Now, I will preface (like every time) that I am not a financial advisor. And this is purely my experience with banking. I am 4 years into adulting, so I am feeling pretty confident that my bank accounts are the ones that will stay with me throughout my adulting journey.

So shall we continue?

I have 5 main bank accounts. These are the ones I heavily rely on to function and feel like I have a semblance of a grasp on my finances. Also, just because I have this many accounts, does not mean I am earning the kind of money to fill them up. I like to hope one day I will be earning enough money to feel financial security within my accounts. But for now, we have financial turbulence. 🤣

5 bank accounts that an adult should have

• Current account: This is your debit account, where your pay and direct debits occur. Use this account to filter money to the bank accounts you do use. This is just a hub, and thus I don’t use my debit card. I am with NatWest for this, where I earn £2 a month just for having direct debits and opening the bank app. Simple enough.

• The spending account: This is not a current account, but another debit account. I do all my shopping on this, because I can earn up to £15 per month cashback. I have round up which earns 5% interest. And they have great easy-access “high-yield” savings accounts, at ~3%. I use Chase bank for this. The savings accounts are useful for things that are slight emergencies, like my car or a quick payment on a bill (need less than 24hrs to respond).

• Emergency savings account: The true High-Yield savings account. It’s slightly hard to reach as I do need 24 hours notice to withdraw cash, but I earn 4% interest. So it’s worth it. I use this in big financial emergencies, and my provider does not have a limit on how many withdraws I can do, but I have never used it more than once a year. I use RCI bank for this.

• LISA: This is for my house deposit, but you can also use a LISA for retirement savings. You get 25% of what you put in, topped up by the government, with a yearly limit of £4k to put in. So, each year I aim to max it out (£4k), so I get £1k from the government. Note, if you withdraw from this account, for anything else other than retirement or a house deposit, you lose 25% of what you withdrew. So, you need a lot of discipline for this. I use Moneybox for this one.

• Stocks and Shares ISA: This is to top up your retirement, because you can access this money if you retire earlier than that pension age. (👀) In the UK we get £20k every year for all ISA’s. This means you have to spread the money between S&S ISA, the LISA and any other ISA’s you have. So, after the LISA, there is £16k to save in the S&S ISA. I put £50 per month, but hopefully as my salary increases, I will increase my contributions. I invest in index funds (S&P 500 and FTSE 100), since they cover a lot of global markets. The sooner you start investing, the more time your money has to grow, and thus the more you’ll have in the end. I do this method as it doesn’t require too much thinking, so I can let it work in the background. If it interests you, feel free to read around the topic and make your decisions based on that. I am currently with InvestEngine but I am actively trying to move from that provider. I loved Vanguard until they changed their fees, and Trading 212, didn’t operate in a way that I wanted it to.

Excluding my current account, I’m earning interest on any balance in my accounts. I’m glad in the mean time my money is doing some of the work, so it’s not just me bringing in the dollar.🤣

Thanks for reading and I hope you have a great week.

Speak soon,

Rue

Adulting For Life