should I get a second bank account to help manage my money??

snailmail

I am hoping some of you will be able to advise me!

I am currently with HSBC and I have found myself getting further and further into my overdraft each month. this month is the first month I think I may be able to stay out of it, and only because I used the CC to help get me out of it before I got paid:mad: (unexpected bills over Xmas and me putting my head in the sand is a scary mix!)

I never want to do this to myself again, so I've promised myself I'm going to be frugal, and make a proper effort to pay off the CC and stay out of my overdraft. I've been ebaying like a demon and have been on a no non-essential spend since January.

I want to be able to keep track of my money easier and thought that having another bank acount where only 'spare' cash for daily (frugal) living could be transfered into might be the way to go.

That way I won't just look at my balance and think I'm fine, but I've forgotten about a certain DD that's not gone out yet.


Does this sound like a good idea? I don't want to switch all my dd/bills to another account, but I thought a 'spends' account might be a good idea, and it would show me how much I actually have to budget things like birthdays/food/general living expenses with.

I need things to be as simple as possible so I don't have to keep trying to work things out as I have a slight case of number blindness and can't always work out the simplest of maths

I would want a very basic account with no overdraft whatsoever as I don't want to start a vicious circle. Can anyone suggest a good bank to go with?

I think I read on the forum here that some banks let you have multiple saving accounts, almost similar to saving pots for a rainy day. that would probably help me as well!

i really don't know where to start!

sorry for the long rambling post. i just wanted to give as much info as i could think of!

any advice would be gratefully appreciated!



thank you!

Savvy_Money

I can only discuss from my experience with Barclays - they have a range of savings accounts which you can name yourself. I have one for holidays, one for bills and one for the car. It does help you budget. I have two current accounts, one with Barclays and one with HSBC. I send £150 per month from Barclays to HSBC via the faster payments service. I have no dd's or so's with HSBC and no o/d. The money is for me to spend.

It all helps me to budget! Good luck with sorting the credit card debt. They can begin to take over!

snailmail

Savvy_Money wrote: »

I can only discuss from my experience with Barclays - they have a range of savings accounts which you can name yourself. I have one for holidays, one for bills and one for the car. It does help you budget. I have two current accounts, one with Barclays and one with HSBC. I send £150 per month from Barclays to HSBC via the faster payments service. I have no dd's or so's with HSBC and no o/d. The money is for me to spend.

It all helps me to budget! Good luck with sorting the credit card debt. They can begin to take over!

thank you! barclays esavings do sound like a good idea and would help me think realistically and clearly about the things i need to save for like vet bills (which is what got me into most of my debt in the first place (i had looked into insurance, but the only place that would insure ferrets was hugely expensive and wouldn't take on ferrets over 5 anyway!))

i know this month will be tough for me because of a friend's hennight and a holiday i booked before i had the added expenditure of my friend getting married and extra bills over Xmas that needed to be paid. but i should only just about go back into my overdraft, and i'm hoping i've over estimated how much the hendo will cost!:)

i think a 'spending' account would remind me not to go overboard and buy unnessisary things, which I admit to doing in the past. Not any more though!

I might even put a sticker saying 'do you really need it' on my debit card!;)

CLAPTON

different systems suit different people

but to run several a/cs does require a high level of organisation otherwise you end up overdrawing on both

Flat_Eric

snailmail wrote: »

thank you! barclays esavings do sound like a good idea and would help me think realistically and clearly about the things i need to save for like vet bills (which is what got me into most of my debt in the first place (i had looked into insurance, but the only place that would insure ferrets was hugely expensive and wouldn't take on ferrets over 5 anyway!))

i know this month will be tough for me because of a friend's hennight and a holiday i booked before i had the added expenditure of my friend getting married and extra bills over Xmas that needed to be paid. but i should only just about go back into my overdraft, and i'm hoping i've over estimated how much the hendo will cost!:)

i think a 'spending' account would remind me not to go overboard and buy unnessisary things, which I admit to doing in the past. Not any more though!

I might even put a sticker saying 'do you really need it' on my debit card!;)

I have two accounts with my bank and both have overdrafts - one is £500 and one is £250. The idea of the second account was an account for my spending money. It works ok but I don't really use it for what I intended and I have found myself overdrawing both accounts which then eats into my salary when I get paid and if I had only had the one account, I wouldn't be able to do that.

The idea of two accounts is a good idea but be wary of applying for an overdraft for the second account - perhaps just have a small £50 overdraft as a buffer??

snailmail

thanks for all the advice. i have applied to barclays, i'll know next week if they accept me. i don't want an overdraft at all with them. i just want a place for my 'spare' money to go so i can see it without everything else attached and without the lure of an overdraft.

eventually i want to get to the point where i can decrease the overdraft on my current account so i only have a buffer in case of emergencies. it's way too easy to start classing that as 'my money'

The seperate account definitely won't have an overdraft attached; i already told them this when i applied, and i'm going to make sure I'm much more aware of what I spend in the future and save for things in advance as much as i can

getmore4less

2 things need to happen

1. Spending diary in your pocket and track everything by hand.

2. Budget, thats a plan of what you are going to spend the income on.


The budget/plan need to be at least a full year ahead and kept upto date by the tracking.

Using the ballances in accounts to determine spending will go wrong.

Plan ahead and stick to it or reballance when you can't.

Mikeyorks

snailmail wrote: »

I want to be able to keep track of my money easier and thought that having another bank acount where only 'spare' cash for daily (frugal) living could be transfered into might be the way to go.

Doesn't work. It starts - and ends - with the simple premise that if you can't manage one account ....... you certainly can't manage two? As you have to keep both in credit.

I had to micro manage our money for many years. Developed a very simple system that didn't make life easier - but I knew how much money we had at any point in the month. Which is what you're after? At that point it's all about will power / budgets etc.

You start when you get paid. Write down the payment - and then add in / subtract (ring the amount where it's negative - carrying a red pen, you soon give up on) any existing balance on a separate line. Total in the end column. Then - separately - write down, in date order, all the DDs due to come out before next pay day. You now have an amount that is left for you to live on. Every time you spend on your Debit card (avoid cash if you can - it fritters) - you note it down and with a new reduced balance. If you want to cross check to your Bank account ..... you just add back any DDs you've subtracted but which aren't yet paid. Totally simple and worked for me for many years.

I carry my Debit Card in a little wallet it came in - and which has several Debit Card sized plastic sleeves. Halifax issued these - many years ago - with some little ruled cards - which is what I use for the recording. Needs a date / item / amount / balance columns. When they ran out - I knocked up an A4 template and print a few off (both sides) every few years. And cut them up to fit. It's the only faffy part of the whole process. Even the wife migrated her housekeeping account on to it. And if she can keep track of her money - anyone can!

le_loup

Don't do it.
What you do need is discipline. Real hard but doable if you really want to do it. Your not unemployed, you've not fallen on hard times, you just spend more than you take in.
As others have said two account COULD double the problem. Mike above has a solution. Try it.

snailmail

i now know what my essential outgoings are each month, such as CC payments, rent, phone etc and if i didn't have a friend's hen night and wedding coming up as well as a holiday payment/holiday in may (holiday was booked before my friend's wedding and before i needed new glasses; when i thought I'd have more money!)


i just thought that if i put the spending money into a seperate account that had no option of an overdraft I wouldn't be tempted, and then from the money I transfer into that account I could then divide up into the different 'pots' i want to save for using the e-savings some banks have.


come march my pro-study loan ends so with the money i pay on that i want to pay more to the cc; and clear the hsbc one quickly, though with the extra expendature these next few months I'm going to leave myself a little of it as an extra buffer to help keep me out of my current account overdraft.

if i did get another account, even though I've said no overdraft they couldn't just sneak one on could they? I don't intend to let myself get to the point where I don't know what I have in that account so theoretically i couldn't go over, but i'd definitely want a strict NO overdraft if I did decide this.


you've all given some really good advice, and i think i am going to start a spend journal. i'm pretty good when i go to work now as i take my own lunch and don't leave the staff room, thus avoiding temptation! But I think a spends diary will keep me focused and on track.

i tend to get off track when something crappy happens, so i spend and eat to make me feel better--which obviously doesn't really work!


another option is to work out what i can live on a month (as little as possible) and put the difference after all bills have been (overpayed) into my ISA.

sorry for all the rambly indecisions, i guess i'm just thinking 'allowed' lol!

any and all opinions are gratefully recieved,

jennifernil

I think that last idea was the best.

Subtract the essentials from your income, decide on your required monthly spend, then set up a standing order to send the rest to your savings.

To make sure you don't then overspend, keep track of your day to day spending, and only allow yourself so much per week so you don't end up with nothing left after 3 weeks!