Buzz
Many banks let you create a special savings account within your main account, which you can label for specific goals like Quarterly Taxes, 2018 Italy trip, or Game of Thrones tattoo. This helps you track your progress more easily by separating the savings from your main balance.
How Subaccounts Function
Setting up a subaccount is simple: just create a new account under your main savings account, assign it a label or nickname, and you’re ready to start saving by transferring money into it.
WellsFargo, CapitalOne360, and SmartyPig offer subaccounts, but if your bank doesn’t, tools like Qapital or Tip Yourself can help. With Qapital, link your bank account and create goals within the app, even setting up automated saving rules. Tip Yourself is a virtual savings jar where you can 'tip' yourself whenever you like.
Subaccounts Help Make Your Goal S.M.A.R.T.
Giving your savings goal a clear name makes it more specific, aligning with the S.M.A.R.T. goal framework, which emphasizes that goals should be:
Specific
Measurable
Achievable
Relevant
Time-bound
A vague goal like 'save more money' doesn’t have much direction. It doesn’t motivate you. But when you save with a clear purpose, it’s easier to stay focused and actually follow through — because you know exactly what you're working toward.
Feeling Empowered Can Boost Your Saving Motivation
It’s also about feeling empowered. A 2014 study published in the Journal of Consumer Research suggested that a sense of power can actually increase your ability to save.
The researchers created different scenarios to make participants feel more in control and then asked how much they would be willing to save. Science Daily summarized the findings:
In one experiment, some participants were made to feel powerful by sitting in a tall chair, while others were made to feel powerless by sitting on a low ottoman. All participants answered questions, then had the option to either take their study payment in cash or deposit it in a savings account. The results showed that those who sat in the tall chair saved more of their money compared to those in the low ottoman.
In conclusion, the study found that people who felt powerful saved at a higher rate. While there were some limitations, the paper ultimately concluded: 'Across five studies, this research shows that feeling powerful boosts saving.'
You might be thinking: Alright, but what does this have to do with labeling your accounts?
A vague goal like 'stop spending so much' or 'save more' is not only uninspiring, but it also hints that you’re doing something wrong by fighting your urge to spend. Sure, there’s probably some truth to that—but when you compare it to a specific goal like 'save for college' or 'save for a new apartment,' the tone shifts. Clear, meaningful goals empower you because you’re benefiting from this saving process.
And that's exactly the point—your money habits work for you, whether it’s covering bills or saving for something exciting. But when you define your habits in clear, measurable, and meaningful terms, you feel more in control, which pushes you to stay motivated and reach that epic vacation goal.
