HomePersonal FinanceIs Cash Fungible? Do You Create Separate Bank Accounts for Goals?

Is Cash Fungible? Do You Create Separate Bank Accounts for Goals?

Building on the basics of personal finance that I started talking about last week, one of the biggest changes that The Wife and I made years ago was agreeing that cash isn’t fungible.  It took some convincing on her part to prove to me that creating different cash and investment buckets for specific purposes and goals would be better for us.  While I fought The Wife, initially, my contentions had more to do with logic rather than trying to understand how I, and she, were/are wired.

Currently my bank homepage looks like this:

ing accounts

Why Separate Accounts Works for Me

It took me longer than I’d like to admit to realize it, but for me, mental math does not work.  The money in house projects feels and is treated differently than the vacation fund.  It isn’t just a different purpose, but also what I might save into the account, how I might invade it if there is a need, etc.  I need a clear, albeit fictional, division between my buckets for me to be able to process and feel in control.  If there was one account it would be near impossible for me to know with any type of certainty that I have $X to spend on a vacation and $Y to upgrade/renovate the house.

I know there is someone out there thinking, it doesn’t matter it is all liquid cash – cash is fungible and exchangeable with itself.  However, when I made this slight change in thinking my savings habits completely changed.

The $25 or $50 a week I might be throwing into a vacation fund isn’t going into a black hole known as a general fund – and that keeps me focused and interested.  I use this buckets approach to organizing my non-qualified investments as well:

Fidelity Accts



Do you treat your stock accounts and cash as fungible?  



  1. I keep all of my cash in just one savings account because my bank doesn’t make it easy to set up separate ones. But on my spreadsheet where I keep track of all of my budgeting/spending/savings I make separate distinctions in my savings even though it’s all in the same account. It’s my little compromise for having separate accounts but it just not being all that feasible. It’s not ideal but it’s the best way for me to go without actually opening up 6-7 savings accounts. Banks should allow everything to fall under one savings account but you can make sub-accounts to where each one is separated when you log into your banks’ website.

    • Why not check out Capital One 360 (they took over for ING)? Another reason I like the bank is the lack of liquidity. If I am invading one of these accounts I know I am going to a couple of days. While that may look like a disadvantage to most – it really keeps the money in this world “separate”

      • The only reason I haven’t switched is because everything is already tied/linked to my accounts there. As long as I’m not being charged a fee for the accounts then it’s not worth the hassle to get everything moved over and re-set up everything. I was very close to opening up an account with ING but wanted to see what CapOne did after buying it out.

  2. If you use Quicken, the “Savings Goal” feature will allow you to create separate “virtual” accounts for this purpose. I’ve used that for years to accomplish exactly this, while not having to manage a dozen or so separate checking accounts.

    (I’ll be the first to admit that Quicken has its warts, and IMO there are many things you SHOULDN’T use it for, but this feature actually works pretty well.)

  3. MJTM,
    I also use CapOne 360 and have not been disappointed by the takeover. It’s as though nothing changed but the colors. Still as easy to use as ever. I’ve thought about separate accounts like you have above, but never pulled the trigger. I used mine as a dump for any extra money I have that I’m not investing. It’s also good for transfer into and out of accounts. I’m doing some checking account shuffling now, so I may set up some of those separate 360 accounts to organize better.

  4. One savings account with a chart that shows where each amount came from- birthday gifts, recycling, selling my crafties; or what it’s for- Christmas shopping, regular ol’ saving.


Please enter your comment!
Please enter your name here

Related Articles

Recent Comments