Question on 'pot' allocations

bubblycrazy

Hi, I am getting my head round budgeting and have created an excel spreadsheet.
I have my main bank account and a LLoyds saver and have just opened a second current account (I also have an ISA but am not using it at the moment).


On my spreadsheet I have 7 bills which are due monthly, 6 pots which are monthly spends such as petrol and food, 4 pots which are yearly saved such as home insurance which I pay off in one go, 3 pots which are as and when such as haircuts and clothes, and 5 savings pots such as holiday and home maintenance.


I was going to keep all bills together, and all monthly spends together. I can't decide what to do with the money that is spent annually, should I keep it all together with my savings? Should I keep all my saving pots together? What about money for haircuts and clothes?


My thinking is the more that are kept together, the higher the amount saved therefore higher interest. But will I get mixed up with what is to spend and what is to save?


How does everyone else arrange these?

grumbler

bubblycrazy wrote: »

I was going to keep all bills together, and all monthly spends together. I can't decide what to do with the money that is spent annually, should I keep it all together with my savings? Should I keep all my saving pots together?

Why not?
If you have 'virtual' pots' in the SS for everything, you don't need physical pots. Just make sure that the amounts add up and the total amount in the savings account is bigger than the planned expenses and that your don't spend more than you budgeted.

What about money for haircuts and clothes?

I'd say the same.

Dobbibill

Hi bubblycrazy,

This is just an idea for budgeting.....

Whether monthly or annually bills put them into the 'bills account', it will give you a set amount to leave in there every month which in turn will become habit. This will become an account that almost takes care of itself once it gets going, keep an eye on it but if you do your calculations correctly then once a month you will drop the required funds in it and be done until next month.

Fuel, clothes & haircuts into 2nd current account - I think this is going to be called your spending account, this is going to be the account you will need to watch a little more closely

Food could be done on a CC for the month and the funds put in the bills account so it can be taken by DD in full each month (you would need to know roughly how much you expect this to be - watch this category though as this is where alot of people find they lose track, picking up bits & bobs in between each weekly/monthly shop)

Savings account - EF, birthdays, holidays, Christmas & home maintenance - this can either be in one pot and split on a spreadsheet/budgeting app or have several pots, personally I use different pots with my ISA being my EF, that's just down to personal preference though.

All the above suggestions are just food for thought, based on what works for me, whether you opt for virtual pots or actual additional savings accounts would be something you decide. The idea of pots to allocate every penny to a 'purpose' which you would be doing either way.

Good luck with the budgeting

DB

enthusiasticsaver

I keep all my bill and savings money (including emergency fund) in our main Santander 123 current account to get the 3% interest. I also have a spreadsheet to allocate money annually and monthly to various spends and track the spend on my phone spending tracker app and at the end of the month compare actual spend to the budgeted amount on my spreadsheet.


If I was to start distributing it to various accounts I would be forsaking the interest on my current account.


When the annual bill for things like insurance, tv licence, car tax etc come up I divide the figure by 12 and use that for the coming year. However I would say that my current account always has a fairly big buffer in it by virtue of us keeping our emergency money in it.