how to set up/organise bank accounts?

FireWyrm

Ilona wrote: »

My take on it. A system that has worked for me since opening my first bank account.



Instead of going to the bother of opening up other accounts, you could start keeping a money in and a money out book. Record all your incomings and outgoings. No need to separate pots of cash if you keep your eye on the ball. Make a note of how much, and when you expect money to go into your account. You have done well so far, just keep a watchfull eye on things.
Ilona

Good advice, but I think most of us have tried that in one form or other. The only way to really budget in my opinion is to use cash and different accounts allow a simulation of that without actually carrying cash around.

I've tried a single account and got nowhere. I've tried keeping a list of incoming and outgoing but it never truly reflects what the bank says you have no matter how careful you are. DDs come out a day either side, for different amounts, sometimes not at all in the case of council tax. I just couldn't get a grip on groceries and fuel until I physically separated them from the rest. The other accounts are mostly savings pots which simulate real pots, except, they're not on the shelf and can't get stolen. They have different purposes and I find it comforting having just come through Christmas with zero credit spending since it all came from regular saving throughout the year.

Having said that, what works for one person may not work for another. I should have a spreadsheet, but honestly, I could never keep it up to date, so, I use this method instead. It lacks forward planning capabilities, but means there is limited scope for screw up. I know others on this forum live and die by their spreadsheets though.

tiger_eyes

I just set up another Nationwide FlexAccount to fine-tune my banking a bit more, so here's my new setup, mainly with Nationwide.

Income account. I'm a freelancer and my income comes in dribs and drabs throughout the month. A separate income account allows me to build up each month's money and release it as a monthly wage.

Tax account. I pay a percentage of my income each month into a savings account with the local credit union. That way I can't spend it. I can't even see it when I'm internet banking, so I'm not tempted to consider it *my* money - it belongs to the Inland Revenue. Saving with the credit union also potentially gives me access to low-cost borrowing.

Direct debit account. Rent and bills all go out of this.

Spending account. This is the new one I've created so I can separate out money for variable expenses like food, entertainment and travel.

Easy access savings account. Keep a couple of hundred in here in case I need to top up another account.

ISA. Longer-term savings. I only pay into this account, never take out.

I also have a loan account with the Co-operative where I repay my Career Development Loan. I transfer the payment every month, plus an overpayment that's helping me build up a credit balance. If I'm unable to make the monthly transfer, there's enough money in there to cover the repayments for several months. This doubles as my emergency account in case Nationwide keels over and dies.

OK - that's it.

FireWyrm wrote: »

Also, I know you'll probably laugh, but different banks increase the chances that should one bank experience problems, you are not left high and dry. If I had had ALL of my money with Natwest, when they went down a few months ago, I'd have been up a creek.

Couldn't agree more. It doesn't have to be a bank crash either. In my disorganised student days I got all my Nationwide accounts frozen at least twice (leaving me penniless and hungry) due to sending my bank statements to wrong addresses. Now I always have emergency money in a bank account at a separate bank.

AppleMatt

I'm a big fan of separate accounts - the key is not having too few, or two many for your particular way of doing things

Here's me..

Main Current Account (Natwest)
Salary comes in here, it's the main "central" account that all my money passes through

Secondary Current Account (Barclays)
All my direct debits and bills come from here, after transferring a set amount on each payday. I can relax all month knowing that everything that needs to be paid, is paid, leaving the Natwest balance as "spare cash".

Various savings accounts (A few different banks/building societies)
I divide my savings in to short, medium and long-term savings. Short would be over the next 1-12 months, and that will always be in an easy-access, normal savings account.

Medium-term is a mixture of regular savers and ISAs, long-term is my investments and pensions.

I have everything laid out on a spreadsheet, which nice and clearly sums up where I am with savings goals, credit availability, if I'm owed money, etc.

Chrisblue1962

Hi, like many of the replies on here, from Firewyrm and Rising for example, I too have multiple accounts:

Yorkshire Building Society Cash Transactor a/c - Main Bills Account, funded by salary - this account is technically a savings account but DDs and Standing Orders are allowed has ATM card but no debit card, which given I only use it for bills is fine by me .

Co-op Cashminder account (basic bank account) - personal spending - debit card but no overdraft - can withdraw cash at Post Office.

Lloyds TSB Cash account (basic bank account) - petrol and miscellaneous travel spending only.

Personally, I would opt for a Co-op Cashminder account as you could use it at your local Post Office, manage account online, has a debit card but no overdraft facility.

Alternately, ask your Current Account provider for an additional basic account as you could then move cash between accounts as required.

rising_from_the_ashes

AppleMatt wrote: »

Secondary Current Account (Barclays)
All my direct debits and bills come from here, after transferring a set amount on each payday. I can relax all month knowing that everything that needs to be paid, is paid, leaving the Natwest balance as "spare cash".
.

That's what I love about it - no worrying that a d/debit will bounce ... you'll get charges etc.:D

Have tried cash (hopeless with it) ... having one savings account for all the annual things (raid it as it fairly quickly mounts up:o) .... fingers crossed my set up seems to be working well (for me!) - just need to get the "others" pot established (new one as it fell by the wayside this year) and hope the new basic account to cover cash spends helps!:D

It really is trying to find what works for you

weeble3

I have the following accounts with the same bank

main bank account with card : wages and other monies go in direct debits/standing orders out

spending account with card : spending money is transferred in from main bank account and i spend only this

saving account no card: for christmas and regular expenses car

eventually I will get an isa but not until my debts are cleared.


I calculated what money i have a month coming and what i have going out and what i need to live on. I am hoping that there will be a savings build up in my main account as I am allowing a basic allowance to spend. I take the money out for spending at beginning of the month and transfer to spending account. All online food shop comes from this accoutn i.e petrol and anything else not direct debit/bills

gfplux

Do remember whatever you do that Banks have rules. They are long and complicated and if you break them it will cost YOU money. That is the price of free Bank accounts and most of us play by those rules and don't complain.
However few have sympathy with people who say "I thought the funds were in the account"
So good luck and be careful.

System

Thanks all. I would definitely like to have two separate accounts for my own spending and for spending on the household/groceries. At the moment I am finding that I am paying for household stuff out of my own money and vice versa. Hopefully with 2 accounts it will be easier to keep the two separate. I will ask hsbc if I can have an additional basic or current account for this.

weeble3

avogadro wrote: »

Thanks all. I would definitely like to have two separate accounts for my own spending and for spending on the household/groceries. At the moment I am finding that I am paying for household stuff out of my own money and vice versa. Hopefully with 2 accounts it will be easier to keep the two separate. I will ask hsbc if I can have an additional basic or current account for this.

Thats what i do..have two basic bank accounts at the same bank both with cards: one for wages in and direct debits /bills and the other spending only out of monthly allowance i set myself

365days

Interesting thread. I'm thinking of keeping my salary being paid into account i have now and using that for all bills and opening a new basic current account for my 'spends' which will have my tax credits paid into. Can u apply online? I may strike while the iron is hot!!