Multiple accounts can make it easier to follow a monthly budget

By taking a modern-day approach to savings, you can update an old-fashioned method with all the same advantages.

Americans have trouble saving. While the numbers are down slightly from last year, a new report from PYMNTS and LendingClub, shows that 60 percent of adults live paycheck to paycheck and of those, four in 10 are considered high-income earners. Monthly budgeting (and saving) is beyond many of us.

But savings is critical to lay the foundation for your financial security. Without a nest egg to rely on in an emergency, such as an accident or job loss, or funds to pay for milestone expenses like education or retirement, you may find yourself in a constant struggle with your finances.

You can make it easier to save with the right approach. One idea is a modern take on an old-fashioned way to save, having multiple savings accounts. It’s a great way to build your savings, keep your goals on target and make it easier to manage your money.

A modern take on the envelope method

The classic technique to manage your funds is known as the envelope method. It’s a simple approach: Designate envelopes for each item in your budget, such as food, gas, down payment, etc. And do the same for your savings goals. For instance, you may have savings envelopes for a wedding, college fund, travel or other big purchases. Each month you put a certain amount of money into the envelopes.

Many people have used the envelope method to stay within their budget and manage multiple financial goals. But stuffing envelopes and keeping them in your house may not be entirely practical in our modern world. However, the concept remains powerful, and it can be applied using a more modern method.

Multiple accounts for savings goals and monthly expenses

The modern method is to open multiple personal savings accounts, each one acting like its own “envelope.” It’s far more secure than stashing cash into paper envelopes and is just as simple to manage.. Using multiple savings accounts for specific purposes can help you stay organized and realize your savings goals.

Here are four ways to use savings accounts you may want to consider:

1. Emergency fund: Many financial advisors suggest having an emergency fund equal to six months' salary. This keeps you secure if you should suffer a financial emergency, like a medical bill, job loss or other unexpected life events. 
2. Big-purchase fund: If you're planning to make a big purchase in the future, like paying for a wedding or sending a child off to college, a separate account will help you measure your progress and give you a picture of how you’re progressing toward your goal. 
3. Car fund: Even if you just bought a new car, set aside a little money from each paycheck for routine maintenance and potential repairs. 
4. Monthly expenses: Keeping a separate account for monthly bills, entertainment, groceries and other items can help you stay within budget and meet your expenses each month.

Learn more about how to create a budget for yourself.