Is it worth setting up a separate bank account for when I start working?

mlarmour

I can be good when it comes to my money. I have never used my over draft when I was at university unlike all my friends and I saved quite a bit, however I have since spent most of it, but that was due to having to purchase a couple thinks I needed and I lent some to my mum.
However, I do occasionally go a little spend crazy with my debit card. I was wondering if it was worth setting up another account for when I start working that is just a basic account where I can transfer money out for my bills and to have a direct debit to my current bank account that is money I can spend how I want in the month. I am currently living at home so I don't have many bills and monthly outgoings other than board and my phone bill, but I'd like to get myself into a routine so that when I do eventually move out, I don't get myself into a situation where I can't afford anything.

I'm not sure and I was hoping to get a second opinion from my fellow MSE users about it.

101problems

It sounds like a solid plan!
Big thing is an overdraft is not your money it's the bank and unless you have a student account you are going to pay for it!!
Sounds like you do so first thing before you start saving is to pay that off, if you still have time left pay it off in full before you then transfer the whole balance (including the overdraft) into the best instant access savings account or interest paying current account you can find and start making some money off it until it's time to pay it off. Use a credit card for everyday spends but pay it off in full leaving your money earning interest until the last possible moment.
Set yourself a daily cash limit from your current account and stick to it! Anything you don't use goes into the paying off the credit card fund before you know it you will be making money from the bank instead of paying them

PeacefulWaters

I've lived my life by getting paid into one bank account and sending the bills money off to another account that I never use for cash withdrawals or debit card use.

It's worked well for me. Avoids confusion. Aids savings. Make sure you always round up the size of the bills, add on 10% and review the amount being used to cover those bills regularly.

Perhaps also set up one or more savings account at the same time.

pmduk

Remember to ensure that your salary is still received by the account with the overdraft otherwise you may find it withdrawn.

ViolaLass

101problems wrote: »

It sounds like a solid plan!
Big thing is an overdraft is not your money it's the bank and unless you have a student account you are going to pay for it!!
Sounds like you do so first thing before you start saving is to pay that off, if you still have time left pay it off in full before you then transfer the whole balance (including the overdraft) into the best instant access savings account or interest paying current account you can find and start making some money off it until it's time to pay it off.

Did you read the same opening post as me? I see no indication that the OP has used their overdraft. In fact, they state that they did NOT use it.

mlarmour

I know that the overdraft isn't my money. I've always viewed it as 'loan shark money' because once I go into it they want it back straight away - luckily they just don't break my legs if I don't pay up.
Thank you all for your input though. It has been very helpful

knack92

mlarmour wrote: »

I know that the overdraft isn't my money. I've always viewed it as 'loan shark money' because once I go into it they want it back straight away - luckily they just don't break my legs if I don't pay up.
Thank you all for your input though. It has been very helpful

I would advise looking at the TSB Classic Plus account. 5% interest up to £2000 and all you have to do is pay in £500 per month. It's a full current account so comes with a debit card but you could cut that up so it can't be used or store it away somewhere.

A TSB Classic Plus is where I currently have 75% of my student overdraft stoozed. My bank doesn't seem to have any problem with it.

101problems

ViolaLass wrote: »

Did you read the same opening post as me? I see no indication that the OP has used their overdraft. In fact, they state that they did NOT use it.

"however I have since spent most of it"
Did YOU read the original post!!:rotfl:

Archi_Bald

101problems wrote: »

"however I have since spent most of it"
Did YOU read the original post!!:rotfl:

The OP spent most of their savings. Not of their overdraft, which they never used.

101problems

I'll go sit over on the naughty step:T:doh:

ViolaLass

101problems wrote: »

"however I have since spent most of it"
Did YOU read the original post!!:rotfl:

Ahem...

"I saved quite a bit, however I have since spent most of it"

Edit: see you've spotted it.