Newby - Help!

racheclo

Im looking for a little advice and any help offered would be much appreciated.

I am on the verge of moving out of my parents house and renting my own place. I have worked out my monthly incomings and out goings, and think it would be wise to open another current account to ensure the money needed for my rent, bills etc goes into this new account which will minimise the chance of me spending it and getting myself in to trouble. Is this a good idea or am I just making extra work for myself?

If this is a good idea, can anyone suggest a decent bank to open it with so I will benefit?

Thanks

Rachylou1981

I did a similar thing but the other way round, use your current account for your monthly bills etc and then get another account with same bank and every month transfer your disposable income into there and therefore you can use that one to spend without the worry of any bills not being paid.

You do end up trusting yourself with finances and understanding that there is no option other than to handle them effectively. I now use the other account for saving only and can easily transfer between accounts. It has always been a good thing to have.

racheclo

Thanks, makes more sense!

Really appreciated

ShALLaX

I go one step further than this. I have an account for my salary, an account for spending and an account for monthly outgoings. I ration myself to £300 per month for spending, which includes fuel, food and any nice-to-haves. All of my monthly outgoings come out by direct debit. Anything left goes into yet another savings account.

I find it nice to compartmentalise my money like this because it makes it easy to see how much I have in terms of savings and disposable income. Additionally, it guarantees my bills will be paid with no issues. It also racks me with guilt if I ever have to take money from my savings into my spending account. Plus, anything left over in my spending account can go into the savings pot at the end of the month, which feels quite rewarding. I find this helps to make me a better saver.

The overhead is minimal. Decent online banking will let you set up standing orders between the accounts so you can automate the transfer of money. I'd recommend keeping your "bills" account slightly over the required amount to cover unforeseen additions to direct debits (e.g. Maybe you went over your mobile phone talk time allowance) and to cover for the case when your standing orders or direct debits occur over a weekend and get pushed onto the following working day.

room512

We have a Santander 123 account which we have to pay £2 a month for (i think) but we get cash back for utility bills, council tax, mobile phones (think that's it) but we get far more back than it costs us. Might be worth looking at.

Link to info about it (get cashback on water, council tax, gas, electricity, mobiles, broadband, phone and tv)