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Savings and Checking Accounts - Is Linking the Two a Good Idea?

You call the bank everyday in order to mentally reconcile your bank account. You never create a monthly budget because you don't want to feel restricted and tied down. Besides, you make enough money, why should you have to budget? You walk into the grocery store and buy whatever you want and never keep the receipts. You notice the amounts on your credit bills slowing creeping up each month.

Chances are if any of these things describe you then you should never link your checking account to your savings account. This is because you are not capable of saving at this point in your life. You need to work on your money management skills before you consider linking savings account and checking account together.

Banks give you the choice to link your checking account to your savings account just as a courtesy. This is an easy way to get to all of your bank accounts at one time. It is for this very reason that the lure of linking the two will not work for a person that does not understand the concept of money management. The possibility of losing money is much greater. You aren't budgeting your money so you won't recognize when you are spending more money until it is too late.

There are many reasons that people choose to link their savings account to their checking account but maybe you should first look at some of the reasons why this would not be a good option for someone in your predicament.

Overdraft Protection

People mostly want to link their accounts together for overdraft protection. If a check is written for more money than is in the bank, then the savings would cause the check to not bounce. All in all this is a good thing. But, for someone who does not know how to manage money, this becomes a way to continue overspending. There will always be a little extra in the bank to catch the budgeting mistakes - maybe.

Lack of Savings

Unfortunately, this little system basically becomes an excuse for you to continue writing checks for more money than you have. If you continue to write checks for more than you have in the account, you will always need overdraft protection, which means you will continue to deplete your savings. Each time that you put money into your savings account, the overdraft protection will kick in and take the money out. Thus, you will always have a lack of savings.

All in all, linking the two accounts together would be a good thing for anyone that knows how to budget their money and spend money responsibly. For anyone else, this makes it hard to become discipline and correctly manage money wisely. If you can manage and budget wisely, then by all means link the two accounts. If you can't do this, then get separate overdraft protection from your bank that does not interfere with your regular savings.