For some periodic bills, like home owner’s insurance, vehicle insurance, and property taxes, take a look at past bills to see how much you spend on them each year and then divide by twelve.  For others, like home and vehicle maintenance, take a look at my Recommended Spending Guidelines to see how much to allocate each month.

Then, take the total monthly cost of all such bills and expenses and set up an automatic monthly transfer from your checking account to this separate savings account. Then, just transfer money back to checking to pay the bill.  Or, with some savings accounts, you can pay the bill directly out of that account.

Just as with an emergency fund savings account, good options for this second savings account include bank or credit union savings or money market accounts.

Using a separate savings account for periodic bills and expenses is one of the most beneficial changes we’ve made in our household over the past five years.  We used to just let the budgeted amounts for such things build up in our checking account, but there’s something very reassuring about setting money aside each month in a separate account for big bills that we know are looming on the horizon.

What are your thoughts on the idea of using two savings accounts?

Matt Bell is the author of three personal finance books published by NavPress, including the brand new "Money & Marriage: A Complete Guide for Engaged and Newly Married Couples."  He teaches a wide variety of workshops, including MoneySmart Marriage, at churches, conferences, universities, and other venues throughout the country.  To learn more about his work and subscribe to his blog, go to: