Help on Piggybank Budgeting, Please!

ambitiouscat

Hello all,

Looking for some advice on piggybanking, please.

I'm trying to get our monthly spending in order by allocating budgets to different areas (groceries, holidays, car, etc.) and want to use the method recommended by Martin of using different bank accounts for different areas and transferring money into them as soon as we get paid, then using the relevant account when I need to purchase something. Any surplus would be put towards OP mortgage. We seem to fritter money left, right and centre, so want to get a firm grip on the budget! Or at least have one!

Only problem is, I'm having trouble working out how best to allocate accounts. I don't want 40 accounts to manage and check, but at the same time I want to get a handle on my expenditure and cut it back! Can people tell me how many accounts they use and what they use each of them for?

Or perhaps people know of a better way of doing this altogether? How do you all keep your 'pots' separate?

I was thinking of the following current accounts:

1. Direct debits (utilities, mortgage, insurances, season ticket, etc.)
2. Car and motorbike (petrol, tax, insurance, repairs, MOT, etc.)
3. Food/groceries (including snacks, nappies, cleaning stuff, toiletries, dog food, etc.)
4. 'Luxuries' (hairdresser, clothes, books, CDs, hobbies, magazines, gardening, eating out, etc.)
5. Christmas and b'days


And the following savings accounts/ISAs that I would hopefully only dip into every year or so:

1. Holidays
2. Big purchases and 'unforeseens' (saving for new car, new kitchen, new wardrobes, repairing things that get broken/replacing stuff, unforeseen medical costs, etc.)
3. Safety net - 3x monthly salary in case of redundancy/ill health
4. Any excess - goal is that anything left over goes towards paying off our mortgage at end of fixed period (no more overpayments allowed without incurring redemption penalty)

That comes to 9 accounts in total. Do other people have this many? Or more? Should I divide categories up further? Should I use a different system?

Any help, criticism or tellings-off very welcome!

Ambitiouscat x

teeni

I have three current acc
1 salary in
2 directdebit
3 shopping/petrol

then savings acc
1 holidays
2 car expences
3 household repiars/emergencys
4 birthdays christmas
5 anything left

the accounts are all with the halifax so can be seen by checking one page on the computer and funds easily moved between each other,
Also get htree £5.00 per month as a reward forthe current acc which goes in the anything left acc.

hopes that helps

Ditch_Crawler

I have an A4 pad with a column for each category of spending (kind of like a 'virtual' bank account for each category). In reality, the money is all in the same account (except that the money for the 'low-frequency' categories is kept in a separate savings account).

Ditch

thatsean

Hi ambitious, sounds like a pretty good idea, my system is pretty similar and is:

1. Current account - wages in, and all DDs/SOs out
2. Day to day expenditure (unallocated 'walking about' money if you like)
3. Emergency pot (with a B/S Passbook account, so I can't raid it)
4. Special occaision savings (birthdays, anniversary)
5. Next years bills saving (i want to move from monthly DD to annual payments for home insurance and c/tax next year)

1,2,4 and 5 are with the same buidling society, and I can view and transfer online - 3 is a seperate institution

Your plan seems pretty good, allthough Ditch's approach of one account with 'cost centres' seems a good way of doing it if you want to cut down on the accounts that you have.

taka

I have a budget spreadsheet set up for the year. I sat down and decided how much I'd need for each category for the year and seperated them according to whether they are paid by Direct debit/SO or whether I have to pay for them myself. For the "pay myself" items I started off with a lump sum (to cover the variations eg loads of birthdays in spring, 0 in autumn!) and divided the rest of the amount I'd need by 12. This is what I transfer each month.

Curr account = money for all DD/SO bills due during the month + Money for food + Going out/entertainment money + £100 for unexpected last minute stuff! An SO goes to fund my savings account. (Almost all of my DDs come out at the beginning of the month so its not too hard to keep track.)

Savings acc @ same bank as curr acc = birthday / Xmas / small household repairs / random spends / clothes / shoes / haircuts / dental / doctor / Mobile (as I'm on PAYG) etc costs. I can transfer this to/from my curr account easily and immediately if I need it as long as I have internet access.

Savings acc elsewhere 1 = bathroom renovation / holiday / sofa fund!

Savings acc elsewhere 2 = 50% of random money generated (eg money from being paid to open / transfer accounts / surveys / selling things I no longer need etc) - the other 50% goes to overpay my mortgage! This money is not part of my budget and I can spend it on whatever I want eg a netbook last summer and a TV (to replace my "not even widescreen" elderly one :eek: :j)

Savings acc elsewhere 3 = £1 at the mo - I use it if I need another account for a random reason so not to confuse myself!

ISAs = emergency funds!

I do have other current accounts but they are mainly for a £5 or because its easier+faster to get my cash out via a current acc than by BACS.