Understanding how much you have to spend

PaulAFC

Hi all

I have completed my budgeting and remember read about using multiple bank accounts as a way to know exactly how much you have to spend each month. Problem is I cannot find the article again in Google.

I have also searched the MSE site, and the forums, but cannot find anything so thought I would share with you all what I am thinking of doing:

• 1 x Current account - Get paid into this account and use it to know exactly how much money you can spend each month once standing orders have moved money to other accounts
  
• 1 x Current account to pay regular outgoings - Transfer in set money on 1st of every month from current account. Used to pay mortgage, all regular household & personal bills and travel expenses Ideally this would be a cashback account (probable Santander as my mortgage is with them)
  
• 1 x Savings account - Transfer in money to pay for planned large purchases or annual costs - football season ticket, car and home insurance, holidays, Christmas etc...
  
• 1 x ISA account - From budget move each month how much you can afford to save to maximise tax savings

Do you think this is possible, a good idea or bad idea or would you advise on any changes?

Cheers
Paul

matttye

Looks good.

If you're disciplined enough you could just have one Santander 123 account to do all four jobs; that's what I do. All my direct debits/standing orders go out on the 1st of the month, so whatever I have left over on the 2nd is available to spend.

It pays 3% interest and offers cashback too.

PaulAFC

matttye wrote: »

Looks good.

If you're disciplined enough you could just have one Santander 123 account to do all four jobs; that's what I do. All my direct debits/standing orders go out on the 1st of the month, so whatever I have left over on the 2nd is available to spend.

It pays 3% interest and offers cashback too.

Is it possible to change your DD/standing order dates then?

matttye

PaulAFC wrote: »

Is it possible to change your DD/standing order dates then?

It is indeed; you can change Standing Order dates yourself. It's very easy through online banking for most banks. However, if you change the date of any bill payments you should always check with the company you're paying that it's okay.

For Direct Debits, you need to ring the companies and ask them to change the dates. Not every company will allow you to change it to any date you like, but they should at least be able to offer a date near your chosen one. You could also ask if you can cancel the DD and pay by SO on your chosen date instead.

PaulAFC

matttye wrote: »

It is indeed; you can change Standing Order dates yourself. It's very easy through online banking for most banks. However, if you change the date of any bill payments you should always check with the company you're paying that it's okay.

For Direct Debits, you need to ring the companies and ask them to change the dates. Not every company will allow you to change it to any date you like, but they should at least be able to offer a date near your chosen one. You could also ask if you can cancel the DD and pay by SO on your chosen date instead.

Thinking about it my concern would be the bills I only get on a 1/4th basis - gas, electricity/water

CLAPTON

more important that having lots of accounts is having a 12 months budget
i.e. estimates of all your likely spending over the next 12 months

obviously this will include usual monthly bills, quarterly like utilities, annual like holidays, xmas, birthday presents, mots, insurances etc.

personally, a decent spreadsheet works well for me as you can track actual spending against 'estimated' spending

the first time you do this can be quite revealing

Bloomberg

PaulAFC wrote: »

Hi all

I have completed my budgeting and remember read about using multiple bank accounts as a way to know exactly how much you have to spend each month. Problem is I cannot find the article again in Google.

I have also searched the MSE site, and the forums, but cannot find anything so thought I would share with you all what I am thinking of doing:

• 1 x Current account - Get paid into this account and use it to know exactly how much money you can spend each month once standing orders have moved money to other accounts
  
• 1 x Current account to pay regular outgoings - Transfer in set money on 1st of every month from current account. Used to pay mortgage, all regular household & personal bills and travel expenses Ideally this would be a cashback account (probable Santander as my mortgage is with them)
  
• 1 x Savings account - Transfer in money to pay for planned large purchases or annual costs - football season ticket, car and home insurance, holidays, Christmas etc...
  
• 1 x ISA account - From budget move each month how much you can afford to save to maximise tax savings

Do you think this is possible, a good idea or bad idea or would you advise on any changes?

Cheers
Paul

Two current accounts is a very good idea for budgeting. For really accurate tracking of where your money goes it is best to go cashless and use a credit card for all of you purchases. This will provide an excellent spending diary.

pqrdef

PaulAFC wrote: »

I have completed my budgeting and remember read about using multiple bank accounts as a way to know exactly how much you have to spend each month.

Knowing how much you've got to spend tends to be a recipe for overspending. The way not to overspend is to budget for everything and then not buy anything that's not in the budget..