Utilising a number of accounts for your money - advice!

Jo_R_2

Hi all

Just wanted to ask... When it comes to setting aside various amounts of money for different things, how do you do it? I have read about some of you having separate accounts to your main current account and having a standing order or direct debit each month transferring allocated amounts into each separate account for different things like shopping budget, annual spends like insurance renewals, car maintenance and so on.

What kind of separate accounts do you use? Are these with the same bank, are they accounts with a card (eg to do online shopping), or are they online ones? Would anyone recommend any bank to do this with (I remember someone saying somewhere that Cahoot have a good online facility for this?)

Loadsa questions, sorry, but any advice would be welcomed!

msmicawber

I don't know whether I'm a good example, but I've got two accounts with the Nationwide - a current account with standing orders, etc. into which all my money is paid. I've also got a savings account with them. I just go in and get them to transfer money from current to savings account. I don't use a standing order because I get dribs and drabs of benefit, which is notoriously unreliable. I don't think the interest is vastly higher on the savings account, it's just that I find it useful for budgeting purposes.

mandy4

I have found multiple accounts very useful. I have a regular transaction account which my pay goes into, then 2 ING accounts, one for bills which is essentially all my expenses, one for savings. I move money out of my account every pay according to my budget. If I need to pay a bill, I move the money from my ING account back into my regular account and pay it by net banking.

As well as this, I take out a certain amount of cash every pay for expenses such as train fares and entertainment/takeaway, then leave a set amount in my original transaction account for eftpos expenses such as groceries and petrol.

I have found this very helpful so far as I've worked out absolutely every expense in my budget, so I know that any money left over when I get paid again can go to savings or my cc, that I don't have to leave it there for bills that may come up because I know if it's in my account, it will mysteriously disappear.

However, this works for me as I have alot of willpower and have never taken money back out of my other accounts to pay for extra expenses I've incurred. If I spend too much on entertainment or something, I cut down the amount I spend on food to even it back out.

In addition to this and to keep track of my budget, I keep a spreadsheet up to date with everything I spend and each pay period write everything I spent under the different headings of my budget so I can review what I've spent and where I can try to cut back. I also track which bills I paid from my bills account and what I had leftover to pay cc or savings so I know exactly where all my money is going. This took a bit of effort for me to set up, but has been well worth the effort.

Hope this helps!

Imelda

Hi Jo_R,
I have 4 accounts, 2 current and 2 savings.
I pay by standing order a set amount into my bills account from which all my dds, food and min payment of my credit card are paid. I pay another set amount into one of my savings accounts for annual bills such as car insurance and xmas. Then I put aside money in the other savings account to pay off my credit card at the end of the 0% period (and for future one off's such as a weekend away). Then whatever is left in the original current account is mine for entertainment, clothes, birthdays etc.
I keep a spreadsheet up to date as well, not only to see the current balance but also to see a projection based on future expenditure (so if I get tempted to dip into my savings I can see what effect this will have in the future).
I also have an ISA for longer term savings but I am not contributing much to that at the moment (I just pay in what I have left over from my 2 current accounts at the end of the month- have racked up £66 since April!!).
I think you have to find a system that suits you (and also beware that transfers between accounts in different banks can take up to 3 days, I have all my accounts with HSBC and First Direct to eliminate this problem).

MoneyMagnet

I find having several accounts very useful. I'm with the Coop bank, and have:

1 regular current account
1 Pathfinder account (a savings account with a Visa debit card & SO/DD facilities, so in effect a second current account)
2 Cashsaver savings accounts
1 Smart Saver savings account
1 ISA
(plus a fixed term deposit account which I don't touch)

I bank online, so it's very easy to transfer money between all of these, and the transfers are instant. I use the current account for my day to day banking, the Pathfinder for my part time business income, the smart saver for putting aside tax/NI (I'm partly self-employed), and the 2 Cashsavers for putting money aside for specific things. There's not much in the ISA currently as I'm focusing on paying off a loan with any spare cash, but when that's paid I'll use the ISA for my easy access savings.

I chose the Coop for their ethical policies, but I'm very pleased with their online banking facilities too. I don't think I could manage with just the one account!

DontDoDebtKids

I'm also a fan of multiple accounts:

Main account to receive salary etc
- Standing order to Joint account for bills and groceries
- Standing order to seperate "Spending" current account for spending money

The remaining money in the main account is then used for paying off my debts.

Locana

Hi

I have a woolwich openplan account for my wages etc, and they offer up to 10 or twelve 'sub' accounts (all with seperate account numbers for DD's Child Benefit etc). When I get paid I have standing orders from my main account into bills account, household account, etc... It's so much easier as I know that my bills account is topped up every month and I dont worry about anything until the next pay day (so no more charges etc!). A lot of banks do this kind of account so it would be good to look around. Although I do remember that when I looked at my credit file it said that I had eight current accounts!!! So think about it!! I don't know if that looks bad on your file??

Ta
Lo

little_miss_thrifty

Hi, i have a current acc with Co-op which Child Benefit and Ebay sale money gets transferred into - children's savings also get transferred out of this acc to their own saving acc's. This account is also used for house maintenance and money is also transferred in from joint acc for house bills.
Have a joint acc with Barclays for mortgage, council tax etc and a side acc which a small amount is put aside each month for lump sums to come off mortgage capital.

lady_fuschia

I sense a theme developing here:
I have several accounts- a NAtionwide Flexaccount that my wages go into and Direct Debits for bills, debts and for other accounts comes out of, which I don't touch. I have a Tesco Clubcard Plus account for the shopping money (bonus points!), an overdrawn (interest free at present) RBS account that I'm slowly paying off with DD and have made myself forget pin number so taking money out isn't an option, and finally a Smile basic internet account where my £40 a month for entertainment/ clothes/treats goes.
I don't think there's any particular financial advantage, but I do find it a lot easier to keep an eye on how much spare cash I actually have. OH says he thinks its really confusing though, so its probably not for everyone.

EagerLearner

Hi Jo - you may find my spreadsheet below useful for tracking the savings part of your budget in one 'pot'. Also helps with your remaining spending during the month.

You could even use the 'savings pot' tab for your current account (rather than savings) if you want to avoid opening lots of accounts.

- I have my sole account with First Direct, wages come into this.
- When wages come in I transfer £235 to joint account for household bills and shopping.
- I then transfer cash for 'frills' spending etc during the month to my Egg Money card which earns 4% interest and 1% cashback on all purchases.
- I then transfer savings to ICICI account.

houseboatdream

Hmm........I think I might have too many accounts, but the system works for me.

I have an A&L current account that my wages go into and all DD/SO for council tax, electric etc come out of.

I transfer a set amount every month by DD onto an Egg Money card for housekeeping (4% interest and cash back)

I have an ING savings account - ING let you have at least six separate "pots" of money in different named accounts, you give them names yourself, so i have accounts for tax, my horse, the dogs, annual expenses such as presents and house insurance, the camper van annual running costs and saving up for holidays. Some of these have a regular DD to them, others I transfer money to when I have some left over at the end of the month.

I also have two savings accounts with A&L. An ISA that has my emergency fund in it (3 months living expsenses) and an Online Saver - this is the one I am using to save up to pay the campervan loan early (I hope).

I also have a joint account with my OH - A Nationwide Flexaccount with a combined e-savings account. this is where we are saving our living expenses money for our year off travelling, although we also use this account when we are in Europe as the overseas cash withdrawls are free.

OH has his own current account too - I have just got him to change from 34 yeasr with Barclays to A&L for the refer a friend deal!

Wow! Thats complicated - no wonder I have got 12 spreadsheets!