How much for clothing/birthday/emergency funds? New SOA

FireWyrm

Hmm...make sure that money is in a decent interest earning account then. No reason why it should be sitting idle while you save it.

Another idea for you. If you form a monthly 'running expense' fund with a bank, you will probably want to separate your monthly spending from your bills account. If you do, then SO a monthly stipend into your running account and at the end of the month, zero the account by moving any unused money into a savings account.

Some people bunt the pennies into savings on a weekly basis too. This just means that you look at your accounts once a week and transfer the odd pennies somewhere. It ensures that you look at each account at least once a week (you wont get taken by surprise on a bill or fraud) and it keeps the arithmetic simple as you're working in whole pounds only.

Finally, if you can manage it, arrange to have all your bills come out on the first of the month - or the second is better. This means you get paid on the last day of the month and all your bills are paid two days later. Anything left is fair game for the savings pot. Where most people trip up is that they have bills coming out at odd days throughout the month and use the same account for ad-hoc spending as well. Separate the two and you wont ever get a bank fine because you cant physically make a mistake like that. Your running account should be an entirely different bank because if one bank goes down you're stuffed - but two is very unlikely. If we do lose two banks at once, the whole world is coming to an end and we'll all have bigger problems to deal with than a few fines.

[Deleted User]

RockPaperScissors wrote: »

It's just what I put away at the moment

In that case, all you will pay is what you are billed for.

However, paying the bills quarterly, as they arrive, does take will power.

There's always the temptation, when you find yourself a bit short, to "borrow a fiver till pay day".

Paying monthly removes that temptation.

RockPaperScissors

Thanks both!

I'll look into moving to the monthly DD instead!

FireWyrm - Luckily I thought about that before we moved in so we have an entirely seperate "mortage and bills" account in which I pay £700 a month in via SO on payday

Thanks for all these tips guys - seriously useful! Hadn't thought about the lack of interest on my energy money at all!

[Deleted User]

I use a variation on that FireWyrm.

My first rest day after I get paid, I draw out some cash and pay a month's Rent, Council Tax, Electricity, Gas, Water and Lottery.

I have a SO set up, to transfer enough (plus £40-ish) into my second Account, which has DDs to pay the remainder of my bills, ie. Union Fees, home and car insurance, etc.

A maximum of a week after pay day (usually less), all regular bills are accounted for, leaving the money in my main account for food and diesel.

I'm sad but organised.

tiger_eyes

FireWyrm wrote: »

Your running account should be an entirely different bank because if one bank goes down you're stuffed - but two is very unlikely. If we do lose two banks at once, the whole world is coming to an end and we'll all have bigger problems to deal with than a few fines.

When I was a baby tiger I learned a hard lesson about what can happen when you have all your bank accounts with the same bank. I am a cautionary tale. :D

RockPaperScissors

Yeha I have actually set my DD's for mid-month because I get a better sense of what's happening that way.

My £700 goes in on the last day of the month when I get paid, my other half is self employed and his goes in around the first-second week each month. That way all cash is in there by the time anything starts coming out

Plus we had two months worth put in there already when we moved in (around 2k) so that we were well covered in case of any unforseen circumstances/being paid late and missing bill dates!

I too am a bit sad... though a little less organised

FireWyrm

If I had been as organised as us a few years ago BB, I wouldnt be in this mess...see the thread you started at 12pm for my responses to that.

RockPaperScissors - you are on the right path, now stick to it and you wont go far wrong.

'Hope for the best, prepare for the worst and you wont be surprised by anything in between' is a motto that should be tattooed on the forehead of every 18 year old just starting out.

FireWyrm

tiger_eyes wrote: »

When I was a baby tiger I learned a hard lesson about what can happen when you have all your bank accounts with the same bank. I am a cautionary tale. :D

Care to share so we all learn?

RockPaperScissors

FireWyrm wrote: »

Care to share so we all learn?

Yes pray tell Tiger!

RockPaperScissors

FYI - have just set up Lloyds TSB Cash ISA Saver and set "goals" for Birthdays, Car stuff, Clothes and Emergency fund all with SO's set up for each one!

Time to get organised!!!