Help with my banking

daytripper99

Hi all, I really really hope someone on here can help me with it, as I suspect it's a fairly simple matter that I'm not aware of since I'm really new to this (I'm 22!)

The situation in short
So my salary is £1300 per month, and I've been working on reducing my expenses down successfully quite a bit. My plan is to save £500 every month since I realize that I can live comfortably as long as I learn to budget.

My Problem
I find that I'm able to stick to my budget much better if I just don't have the money in my account (obvious, I know). I was wondering if there's a strategy that any of you follow for this?

I'm talking

• Having a savings account in a separate bank that you don't carry a cash card for?
• Investing it so you can't easily get to it
• or something else I might not know about

I'm way too new to this, and would really appreciate any article links referring to this. I've read a few articles on the forums and the website but none of them really were related to this problem.

Be very grateful if you could help me get started! :beer:

Daytripper

foxgloves

We have set up 2 separate savings accounts, both with NS&I actually, as these can be accessed at local post office so interest not great, but it's convenient. One is what we think of as the 'Emergency fund' which we try not to touch at all unless we have an emergency we just can't pay for any other way. I'm thinking of things like water coming through the ceiling, a massive car repair bill, that kind of thing. I have set up a direct debit from my current account for £100 a month to be paid into that. It doesn't sound much, but when I got the last statement, it had built up quite nicely into a worthwhile amount. The other account is what we use when we are saving up for something in particular, for example, a new car, a holiday, the big purchases that in the old days we'd have bunged straight onto the overdraft or a credit card. We don't pay a set amount into that account. What we do is stick to our monthly budget, then at the end of the month, we both look at our current accounts, and see what we can afford to pay into the account for the thing we're saving for. It's worth always leaving a 'cushion' of money in your current account because you never know when there might be an unexpected expense that could tip you into overdraft. I think the reason this works for us, is that at the end of each month, the amount we have to pay into this account really does rely on how well we've stuck to our budget in the month and on any economies we have made. But in addition, the regular £100 direct debit into the Emergency Fund means we have got at least something in case one of us is made redundant or the house starts caving in! I do agree with you, though that if you leave all your spare money in your current accouont, there is a greater likelihood of frittering it away on stuff.

pure_dead_dopey

daytripper99 wrote: »

Hi all, I really really hope someone on here can help me with it, as I suspect it's a fairly simple matter that I'm not aware of since I'm really new to this (I'm 22!)

The situation in short
So my salary is £1300 per month, and I've been working on reducing my expenses down successfully quite a bit. My plan is to save £500 every month since I realize that I can live comfortably as long as I learn to budget.

My Problem
I find that I'm able to stick to my budget much better if I just don't have the money in my account (obvious, I know). I was wondering if there's a strategy that any of you follow for this?

I'm talking

• Having a savings account in a separate bank that you don't carry a cash card for?
• Investing it so you can't easily get to it
• or something else I might not know about

I'm way too new to this, and would really appreciate any article links referring to this. I've read a few articles on the forums and the website but none of them really were related to this problem.

Be very grateful if you could help me get started! :beer:

Daytripper

Hi daytripper

I am on a DMP and have to budget really carefully, so I have 3 accounts, my current account where all the ins and outs go, a linked savings account where I put the money for the things I pay yearly, so things like TV license etc. I also put stuff that I budget for each month, ie clothes but might not spend so that I am covered for big purchases all in this account. Then I have a savings account which I only put money in that I don't want to spend, ie longterm savings.

I manage all our accounts online, which makes the ins and outs pretty simple.

Good luck hope this helps

Jo_R_2

I thought about the separate accounts for aaaaages but it was only once I actually implemented them that I found things much easier!

My current account is where all my money initially arrives into:D From here at the start of the month I transfer planned amounts to different accounts, for example at the mo I transfer an amount for car tax into an internet saver with instant access, an amount for presents and Christmas into a separate basic account which has a card should I need it, and am transferring £20 a month into an internet saver for my holiday spends amongst other things.

This leaves the money in my current account for direct debits and standing orders, plus my mobile phone monthly £10 top up which I pay by card, and in addition any amounts for other monthly allocated spends which I need to withdraw in cash: for example lunch and snack money for DD2's nursery, milk money for DD1's school, or going out money. There's also an amount in there for toiletries just for me, which I can either withdraw in cash or pay for on my card as I know the money is there.

That leaves in my current account a surplus. Others sometimes do it differently but I leave it sat there in case it's needed; say I have to make an unplanned trip into town, pay for a playgroup I hadn't planned, a school trip at short notice, I use the surplus. I keep all receipts and a running total so I know how much is left for everything and tot it up regularly.

Any surplus left over at the end of the month is used to overpay on the credit card and then we start again:D

I find it clever to plan what accounts you may need access to online or via cash machine, and those you definitely DON'T want to be able to just dip into withou measured thought. My current account is managed online, as is my basic account and my internet savers;); however I have a monthly saver which can only be accessed through the branch which is trip into town so it gets left well alone simply because of the hassle I'd have to go to to get into it! Having said that it's very easy to be disciplined if you keep on top, plan plan plan for the start of the month and know what you need to spend on, what needs to come out, and what is discretionary.

foxgloves

Agree with JO_R about having a bit saved for Christmas expenses. Even if you don't believe in spending obscene amounts of money on what is supposed to be a Midwinter festival rather than a consumerist shopping orgy, it's so easy to end up spending mroe than planned. I haven't got a separate account for Christmas savings but I do have a sealed pot into which I'm paying a few 50ps & £1 coins a week to help offset this.

daytripper99

Thanks for this guys, wanted to know if any of you out there was doing this and how it was working out..since it seemed to work in theory but didn't know what it's effects would be.

Do you guys specifically recommend any particular bank accounts for this? I mean ones that have intenet savers/ones that don't give you a cash machine card? any specific bank names?

Cleosmum

I have an HSBC current account which money goes into, and direct debits and SO get paid out of. I have a 2nd current account which cheques go out of, and as soon as I write a cheque I transfer that amount over and I know its spoken for. I also have 2 flexible savers attached to my accounts and I pay things like rent into one until its due to be paid. The other saver isnt used very often tbh, but I keep it there in case I need it. The flexi savers dont have a card, you just transfer it over to your current account if you need to access it. I would recommend HSBC, I really like the internet banking, nice and easy to use, transfer around, pay bills and check pending stuff.