Best way to organise money

teekay_tk

Hi

After going on DMP, I have just one bank account. Which is good, however, I find it difficult to keep money away for rainy days. Most payments are made with cards or electronically. I am wondering is there a better way to, say, save up for car repairs separately from emergency fund etc etc. So this money does not get used up for some other bill or even a treat.

I was thinking may be getting a couple of the pre-pay cards and keep money in there but they cost quite a bit. Or start keeping money in cash? But that sounds a bit risky.

Any advise welcome.

thanks

greensalad

Open an ISA, put all savings in there.

Use YNAB to keep track of savings pots, even though they're lumped altogether.

E.g savings ISA has £1000 in, but YNAB tells you that £300 is car maintenance, £100 is rainy day, £200 is Christmas etc...

zenshi

I have a seperate bank account for my PT wages which is used for my debt repayments and not touched. My main account does my DD and again I do not use it so it looks after itself.

I put away X in a tin which is for my yearly bills as and when they crop up. So far it's worked fab but you do need discipline not to dip in....

mum2one

I'd open an ISA and maybe a 2nd current account, that way you can have the one off expenses in ISA and then the current account for odds and ends spending, that way you can transfer the ISA into the current account for when you need it.

I'm on a dmp - and not a prob having a 2nd current account x

andyfromotley

Do not use a prepay card, they are a terrible idea!!

If you use ynab or similar you could keep it all in one account in theorey, and if you live your life by ynab you will not spend your savings, however back in the real world you simply need a second basic bank or savings account. An isa is good in theorey but given the relatively small amount i suspect you will have a normal basic bank account will do just fine.

FreeBear

Set up a savings account with a local credit union and deposit a regular amount each month. Should you ever need it, the CU can offer loans at a much lower interest rate than most banks.

For example, Lloyds offered me a £5K loan with an interest rate of some 22% compared to the same amount from a CU for just 12.7%.

In addition, I'd also save a regular amount with an ISA - Although interest rates are not great, and upcoming changes to tax rules remove the basic incentive of an ISA (tax free interest), they are still a convenient way of saving.

Sanctioned_Parts_List

I keep the emergency/redundancy fund in an instant access account next to my bank account (same bank). Long term savings haven't started yet but will go into an appropriate ISA somewhere else. I run everything else out of one bank account. (I'm not on a DMP).

I keep everything in the computer - the software tracks scheduled payments and budgets, and allows me to balance out costs over the year. I've had to get into the habit of entering all the receipts into the computer whenever I come home, as soon as I come home (apart from the last couple of months where life's a little different). So after 2 years of that I've learned to keep a running total in my mind of exactly what's coming in and going out, and what's left for me, even if the account is some way above zero.

My wife has a simpler solution. She prefers to handle cash, as she finds spending on cards as significant as playing a video game. She keeps a handwritten ledger in a notebook, and marks scheduled payments on a calendar pinned to the fridge.

zenshi

Sanctioned_Parts_List wrote: »

My wife has a simpler solution. She prefers to handle cash, as she finds spending on cards as significant as playing a video game. She keeps a handwritten ledger in a notebook, and marks scheduled payments on a calendar pinned to the fridge.

I do this also, seems more real to me written on paper

greensalad

andyfromotley wrote: »

Do not use a prepay card, they are a terrible idea!!

Why? I use a prepaid card for all my weekly expenditure and top it up once a week.

teekay_tk

Thanks for all the replies. I am thinking of asking my bank for another basic bank account. Then give YNAB a try. I'll try and review it here when I have tried it a few months.

Thanks all

January2015

Sounds drastic, but we have 3 bank accounts and 1 savings account.

Bank account 1 - hubby's salary goes in and what is required for bills and DMP is transferred to Bank account 3. Small balance left which is hubby's fuel money for the money and a very small personal spend allowance. Hubby knows what he has and has to stick to it.

Bank account 2 - my salary goes in and what is required for bills and DMP is transferred to Bank account 3 What is put away for savings is transferred to savings account. Balance is monthly groceries allowance, fuel for me, and small spend allowance for me.

Bank account 3. Funded from hubby's and my salaries. No debit card on this account. Only payments that go out are Direct Debits and standing orders for bills and DMP payments.

Savings account - does what it says on the tin (although it's been accessed quite a few times for car repairs over the last year!).

We use YNAB4. Couldn't be without it now.