Several decades ago saving money was a bit more simple than it is today. At one time people simply worked to pay their bills and save money for ….well whatever. While it is certainly necessary to save money for any and all expenses, the strategy you use to save money can make the difference between financial security and just getting by. In today’s world it is not only recommended but almost necessary to have several different savings accounts to fund various expenses. You should have a well padded emergency fund, retirement savings and maybe even a rainy day fund. In addition to these standard savings accounts, you should also consider having an account for reoccurring expenses. Here is how to get started.

• Determine what reoccurring expenses you have- Most people budget for monthly expenses with “extra” money going into savings. Unfortunately we all have regular reoccurring expenses that we end up paying out of savings that could have been budgeted for throughout the year. Sit down and make a list of things like car insurance, homeowners insurance, taxes, annual vacations and gifts for special events such as birthdays, anniversaries and holidays. These expenses may come once a year, semi annually or quarterly.

• Make a plan- Once you know what reoccurring expenses you have including the amount and when they are due you can then determine how much money you have to set aside each month to cover these expenses. With that number in mind you now know how much you have to save each month in order to pay your reoccurring expenses when they are due.

• Open a separate account for reoccurring expenses- The whole point of saving for reoccurring expenses is to avoid using your other savings to cover the expense. With that in mind it is a good idea to open and maintain a separate account to avoid using this money for other expenses that pop up throughout the year. Many people find that online savings accounts are convenient for reoccurring expenses due to the convenience and availability of funds. You can easily set up a direct deposit into your savings account to avoid the hassle of manually depositing money (thus avoiding the temptation to use that money for other expenses) while reaping the benefits of a FDIC insured bank that offers a higher than normal interest rate. Many online savings accounts do not require a minimum deposit and while they are accessible they are not too accessible where you would have instant access to the cash should you want to use it for something else.

Some people may think that multiple savings accounts is simply a waste of time and requires more energy than it is worth to maintain. In reality by having separate accounts for specific goals you are better able to stay organized and track your progress to ensure you are on target for financial goals.