How much do you need as a float in your bank acc?

Magicboo

Hi,
I'm hoping I don't sound too silly, asking this question, but I just wanted to know what other people did.
When my salary goes into my bank account, all my bills/mortgage etc..go out within a couple of days, and I also have a few other bank accounts with names such as "car" and "bills" into which I put money to pay for whatever the account covers-e.g. "Car" pays for fuel & MOT's etc..
So, I am recently in a situation where I have more free cash and am hoping to set up a savings account. The thing it, whenever I've tried before, I end up dipping into it for bits & pieces that I haven't accounted for, such as car servicing costing more than I have in my car account, or me being irresponsible and buying too many clothes . This I want to stop, so my question is..
How much to you leave when working out your monthly budgets as a "float" or buffer or whatever?
Out of interest, I'm married but don't have any children (yet-that's what the savings account is for ). I thought that might help if people vary the amount they leave for their buffer/float.

Lokolo

As little as possible, say around £50.

Derivative

Same as above.
If your savings account has no withdrawal penalty there's no sense in leaving any unnecessary cash in a current account.

You should see it more like "an account that pays interest" than a savings account. Nothing wrong with dipping into it every now and then as long as the balance goes up long term.

Magicboo

thank you for that-I hadn't even thought of the interest side of things, just making sure I kept-some-savings-in-my-savings-account.
I must make sure I leave my ISA alone though, if I manage to fill one of those up this year-made that mistake before .

Joe_Bloggs

@Magicboo
I view savings as a buffer to managing your money against the threat of unforeseen budget pressures. That includes bills that come out of the blue.

Without savings you would have to go cap in hand to a lender for trivial amounts where the rates can be extortionate. There seems a price break in interest rates around £7.5K for personal loans but this is of no use to those who owe far less.

The key is to budget,in advance, for a savings cushion. This will be more important than ever given the inflationary pressures and pay restrictions that many now face.
J_B. (only my view)

Trajal

Interesting discussion this.

I keep a buffer of around £400 in my current account. Anything over that after each friday I will sweep into my savings account.

It's not the most efficient way but I wanted to make sure I had funds which could be used instantly in the event of an emergency and my savings acct doesn't have a card with it.

However now I've been able to get a couple of credit cards, I'm pondering lowering this and moving more into savings.

I also have a standing order from my instant access savings account to transfer into my 'regular saver' account which actually comes with a vaguely decent interest rate.

Guess i'll leave the adjustment until after my wedding to be fair but thanks for bringing this up

opinions4u

If you check your account daily without fail, nothing.

If you are prone to mistakes, more than the total value of your standing orders and direct debits.

Joe_Bloggs

Trajal mentions the sweeping method. Faster payments have assisted the near instantaneous movement of funds between savings held with one institution to a payee of another. Often a savings account linked to a current account is needed to send faster payments. I am the payee in most of my transactions and still there are occasional glitches. Hence the need for a float.

I recently transferred money from a savings account that was earning 3% to a current account floating at £100 (earning £5 a month ) then to instantly pay off a credit card (1% on purchases). It took about a minute.

J_B.