How many current accounts should you have?

Gambit

cowbopper wrote: »

I am like yourself, and operate 2 current accounts.
My salary goes into one, and i transfer enough money into the other to cover all the bills that are due to go out between now and next payday. Whatever i have in my main account is mine to spend as i please

That is very similar to what I do! :beer: Except I also transfer 'spending money' from my main account to my Egg Money card. That way I get a bit of interest while its on my card (about 4%) but more importantly I get 1% cashback on everything I spend from money down the pub to shop spend. I think its better than using a debit card because you get cashback and you are also more protected if anything should go wrong ie. fraud.

KiKi

Jon_J wrote: »

How many current accounts should you have?
Should you use cash and cheques only or should you use debit cards as well?

I have one current account with a chequebook and debit card. I use the debit card and cash for almost everything. I only use cheques if I'm sending a cheque to a friend, or a shop that doesn't take cards.

Should you withdraw a sum of cash at the beginning of the week to cover everything or should pay for food, petrol, etc by debit card and with draw say £20 for misc spends?

I think it's what works for you. I pay on cards for my monthly supermarket shop and bigger purchases like clothes; I then take out £10 or £20 a week for lunch at work or other smaller purchases. You have to do what's best for you.

At the moment my salary is paid into one account and I transfer a sum of money to another account which my direct debits are taken from. My parents and grandparents think this is silly! They have always managed with one account per household - plus pay annually or quarterly in many cases to manage their cash flow better.

I personally don't see the point of two accounts, but it works for some.

My salary goes into my current account, and I know exactly how much is going out in DDs and bills each month. I add £140 to that which is my money to spend, and then I transfer everything else to a savings account. So if £3.5K goes in, I know that £1.2K is coming out, and that I need another £140 in there. Everything else I move to a high interest savings account.

It also means that I can't spend any more than that £140 without having to withdraw money from my savings account so I find it disciplines me. I have a £100 free overdraft, though, just in case.

My two account system works in theory, but I'm always transfering from one to another and vice versa. I seem to get in a mess and go overdrawn and in debt!!

I have a budget spreadsheet, but I think I'm staring the obvious in the face!

What do you suggest? Should I keep two accounts or should I do it the old fashioned way?

I don't think the issue is the two accounts - although I personally wouldn't do it that way - the issue seems more to be that you don't know what money you have coming out, and aren't transferring it in time, so you're ending up in debt or overdrawn for other reasons!

You need to know how much you have coming out, and how much is coming in, and how much that leaves you to play with. If two accounts works for you then great. But it sounds like it isn't working for you right now!

I hope you get a system that meets your needs!

KiKi

Gambit

KiKi wrote: »

Everything else I move to a high interest savings account....It also means that I can't spend any more than that £140 without having to withdraw money from my savings account so I find it disciplines me.

I like this idea :beer:
I think I will start doing this once all my debts is cleared!

bronzemonkey

Since finding out about this website I've ended up with 3 current accounts.

I have one with Barclays (no activity but with a £1000 overdraft at 0%), one with First Direct (for £100 bonus, 8% RS, and 0% CC), and one with A&L (8.5%).

My salary goes into the First Direct account. From there I pay off the minimum on my CC (all my spending goes on that card if possible) and make my monthly payment into the FD RS. Everything left then goes straight into the A&L current account from which I put £500/m into the Halifax 10% RS and move everything over £2500 into my Kaupthing account.

I have to be aware of my spending on the CC because I don't have a system like Kiki's...but it also means that I maximise the amount I put away into high interest accounts. I think the system you use ends up depending on what the rates/benefits are of the accounts you have and, of course, personal convenience

Stompa

Jon_J wrote: »

At the moment my salary is paid into one account and I transfer a sum of money to another account which my direct debits are taken from ..... My two account system works in theory

I'm not sure I can see what the advantage is over a single account? Isn't it just making life more complicated?

anniecave

Stompa wrote: »

I'm not sure I can see what the advantage is over a single account? Isn't it just making life more complicated?

If you can have all your bills going out of the second account, and know exactly what they will all be (either fixed amount per month, or variable known in advance) then the advantage is you can transfer enough out from your first account, and then know what you have left to spend that month.

For some people, knowing how much they have left in that way works for them as they know not to spend more than that.

I don't do it that way, as I have quite a few annual bills that would just confuse this method, and I put all my spending on credit card anyway, so it's just a matter of transferring surplus to savings or withdrawing from savings as necessary.

The other reason doing this is if you want to have two current accounts (say to keep a longstanding relationship with one or both, or they have different benefits eg regular savings accounts linked) and both need regular money to be paid in there.

Although I have had two accounts previously, and I tended to just transfer money in and out of the second one for savings accounts, as that was the easy way for me!

Whatever works for you I guess.

tomhill

I've accumilated a lot of current accounts since joinging MSE. I used to have just a HSBC ... now I have accounts with Smile, Halifax, HSBC and Natiowide.

I dont use the HSBC account and the Nationwide account is just for traveling abroad.

My salary gets paid into my Halifax account (which is high interest) and I have a standing order to my current account to cover all my on going bills (rent, pruhealth gym, council tax, water, energy etc). I also transfer my 'spending' money over to my Egg Money card. This system works well for me ... it gives me a lot of control over my money as I can often trace where its gone etc. I've always found it much harder to budget just using 1 account...