I HAVE a love-hate relationship with my bank accounts. I can't help but love them because they keep my money safe. But I hate it for all the trouble it involves -- keeping track between accounts, managing funds, bounced cheques, keeping passbooks and bank statements etc.

However, it needn't be like this. Life provides you with enough stress opportunities (your boss for eg!) already. Your bank account needn't add to it.

You just have to know how to manage your bank account so that it works for you rather than the other way around.

Here are some handy tips:

1. Trim the fat
Multiple accounts are the beginning of stress. Confesses Upasana Raj, a reader, "I have four bank accounts in all. One is a salary account, the second one, where I get good interest rates on my deposit. The other two are close to my residence and I use them to make my payouts. But somewhere I feel the way I'm managing my finances is very chaotic."

Don't let this happen to you. This leads to bounced cheques and mismanagement of funds. Take a long, hard look at how you are banking currently. Figure out what you really need, and then close the rest of your bank accounts within the next 30 days - no more!

2. How much is enough?
Managing your funds so that expenses are met, minimum balance is maintained and funds don't remain idle can be a challenge. So what's the answer? A simple rule of thumb - keep one month's expenses idle in a savings account. This is how you can do it:

- Take an average of the last 6 months expenses by maintaining a diary or using your passbook.
- Be sure not include any non-recurring income like equity dividends, annual bonus, gift from spouse etc or non- recurring expense like jewellery purchase or vacations.
- Add to this sum, any expenses you expect in the foreseeable future (say the next three months).

3. What about savings and investments?
The answer is simple. You've just calculated your monthly expense. Now when you've got enough to equal 2-5 months' expenses then you're ready to invest. Put aside this money in a liquid or floating rate mutual fund, which can be accessed at virtually no notice (24 hours). A 2-5 month range is advisable because that's how long it will take you to find a new job should you (god forbid!) lose your existing job.

In doing so you can be sure that your bank account will no longer be a cause of stress in your life. Don't you wish there was as simple a solution for your boss?

Money Matters Mantras
- Close extra bank accounts within the next 30 days

- Calculate your regular monthly expenditure levels

- Don't keep more than a month's expenses in the bank

- Invest 2-5 months' expenditure in a liquid/ floating rate fund

Also Read:
Big salary, small bank balance
Boost your savings account

Photograph: Petar Petrov/Associated Press

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e-mail: Lovaii Navlakhi

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