Are small value digital payments cluttering your bank statement?
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  • Privy League
  • NRI Services
  • Investors

Do you have just one bank account for all your expenses? If you answered yes to that, things are mostly quite easy for you. You don’t have to remember too many passwords, you can keep an eye on your bank balance easily, and you don’t need to worry about maintaining a minimum balance in multiple bank accounts.

But then, over time, you’ll find that all your minor expenses and your big ticket spends get thrown in the mix, making it extremely hard to keep track of where your money is going. This can get particularly challenging if you use UPI and digital payments a lot.

Right from paying for your daily groceries and your food orders, to spending on minor expenses like accessories, online purchases and more, digital payments may be cluttering your bank statement. This can make it tough to stick to your budget or to save up any major purchases.

If small value digital payments like these are taking up most of your bank statement, it is necessary to separate the two.

Why you need to separate your smaller expenses from the major bank transactions

You may find it easy to manage all your expenses from one account now, but over time, this could definitely get much harder. For this reason and for others, you need to separate your small value digital payments from your big ticket expenses. Here are other reasons to keep these small expenses from cluttering your bank statement.

  • It is easier to track your everyday digital expenses.
  • You can get a better idea of how much you have actually saved up.
  • You can save up for specific goals without letting your regular expenses come in the way.
  • Budgeting and sticking to the budget gets easier.
  • You can identify areas where you tend to overspend.
What can you do to separate your smaller expenses from the bigger spends?

One of the easiest ways to separate your minor expenses from the major ones is to have a separate bank account for the two. In fact, experts recommend having the following types of bank accounts, as a part of the High-5 Banking Method.

1. An account for your essential spends

You can use this bank account to pay for the needs in your daily life. These are the essential spends that keep cropping up in every month’s budget, such as the following expenses —

  • Your house rent or your home loan EMI
  • Other debt repayments
  • Your utility bills like water, electricity and internet costs
  • Your grocery and provision costs
2.An account for your discretionary spends

This account is for your wants. These are essentially your discretionary expenses, which you can curtail, if needed. Some examples of the expenses you can use this account for include —

  • Your personal care like salon and spa expenses
  • Your movie ticket bookings
  • Your gym memberships and other subscriptions
  • Your travel expenses
  • Other premium home essentials and provisions that you don’t need, but want to buy

This is where Kotak Spendz comes into picture. It enables you to separate your small daily expenses like food orders, fuel, mobile recharge, groceries etc. from your important bank statements. Click here to open Spendz & manage your small expenses smartly.

3.An account for emergencies

Emergency expenses are certainly not low-value payments. This is why it is essential to have a separate account for building your emergency fund, so you can clearly assess how much you have saved up for contingencies like the following —

  • An emergency medical treatment or surgery
  • Daily expenses in case of job loss
  • Unexpected home repairs
  • Major vehicle repairs
4.An account for your investments

You may have different financial goals to fulfil, and each of these goals will require its own distinct investments. For instance, your long-term goals, like building a retirement fund and saving up for your child’s higher education, will need investments with a long-term outlook. On the other hand, you will also have different short-term investments to plan for, such as buying a new phone or gadget, saving up for a vacation next year or saving up for your annual insurance premiums.

Having your bank account cluttered with small expenses can prevent you from figuring out how well-prepared you are for these long-term and short-term goals. So, it is always a good idea to have a separate account for these investments. That way, it becomes much easier to keep track of how far along you are on your investment journey, and how much more you need to invest to achieve your goals.


You need not open all of the bank accounts mentioned above at one go. Instead, you can set a target or a deadline, and open each kind account as and when the timeline calls for it. Alternatively, you can also schedule these bank account openings as and when you need them.

That said, if you’re not comfortable with the idea of having too many bank accounts, you can at least have two accounts — one for your daily spends, and the other to save up for your big purchases or make your major transactions. This way, it becomes much easier to track where your income is going.

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Disclaimer: This Article is for information purposes only. The views expressed in this Article do not necessarily constitute the views of Kotak Mahindra Bank Ltd. (“Bank”) or its employees. The Bank makes no warranty of any kind with respect to the completeness or accuracy of the material and articles contained in this Article. The information contained in this Article is sourced from empaneled external experts for the benefit of the customers and it does not constitute legal advice from the Bank. The Bank, its directors, employees and the contributors shall not be responsible or liable for any damage or loss resulting from or arising due to reliance on or use of any information contained herein. Tax laws are subject to amendment from time to time. The above information is for general understanding and reference. This is not legal advice or tax advice, and users are advised to consult their tax advisors before making any decision or taking any action.