Please help me sort my personal finances

mt99

Www.starlingbank.com

basically it is a mobile phone based bank so you download the app from Google Play or I guess the app store if you are on Apple it is a really excellent thank

mt99

Do a search of starling on this forum and you should see the recent thread about starling bank

the good thing about them are that all transactions from debit card etc show up immediately

in about 1 second of you paying with your debit card it is there on your statement so there is no risk of you forgetting things you can always see exactly your spending position

trailingspouse

It's probably worth your while to track every penny for a month or two, just to get a feel for where the money goes. For example, I now reckon to spend about £50 a week at Aldi (two adults, no kids) - sometimes less (ah, that's because I'm using stuff up out of the freezer), sometimes more (aha - re-stocking the wine and needed washing powder). You get the idea. Extras like a take-out coffee every day can mount up (for example, £2.75 on a coffee might not sound much, but that's £27.50 every 10 days). You won't know where the money goes unless you note down where the money goes.

I put everything I can onto a cashback credit card and then pay it off at the end of the month - my reasoning is that the money is being spent anyway, so I might as well get the cash back. I have an Asda card that pays me 0.5% on all purchases, and a Santander 123 card that pays me 1%, 2% or 3% on specific types of spend (supermarkets, department stores, filling stations and rail tickets, basically). I use the Santander card where appropriate, and the Asda card for everything else.

You might find the Old Style board (all about thrift) an interesting read.

sblondon

This is such a good idea, I can see how this would be really useful, definitely going to look into signing up, thanks so much for the tip!

sblondon

I'm definitely going to track my spending for a couple of months as you suggest, so eye opening to realise how much you're spending on small every day items, as you say, it all adds up!

And another recommendation for Santander Cash back card - going to sign up for sure. Thanks for feedback : )

EachPenny

sblondon wrote: »

And another recommendation for Santander Cash back card - going to sign up for sure.

The 123 Credit Card is no longer available, and the benefits were reduced for existing customers so unless you have big spends spread out over all the categories it is hard to earn more cashback than the monthly fee.

The 123 or 123Lite Current Account is a good one to look at though. Unless you have lots of savings it is likely that the Lite version will be the best. You get cashback on certain bills paid by direct debit.

Personally I would avoid cashback credit cards until you feel a lot more comfortable with your finances. It is really easy to get in the mindset of spending money on the card because you earn cashback and forgetting that the money you spend has to be paid off.

One thing to do is to make sure all your credit cards have direct debits set up to pay at least the minimum payment each month. If you rely on manual payments it is easy to forget, which will be an expensive experience. The ideal is to be able to pay your credit card bills in full each month though, there is little point putting money into savings at say 3% if you are paying credit card interest at 18%.

Your goal should be to build up a savings buffer which will mean you don't have to watch your day-to-day spending so much. The relief and lack of stress you get when you know you can cover any bills is worth every bit of economising in the meantime.

sblondon

EachPenny ah this is helpful thank you, I'll definitely look into the Current Account cash back options/ Will also work towards a savings buffer, sounds like a really good goal : )

Sarastro

Money allocated to ‘Pots’ - multiple interest paying current accounts for different things ie holidays, Christmas, car maintenance, household etc - good idea or pointless?

It's a good idea but don't get too obsessed by it. Perhaps one account for salary in, bills paid and another for disposable income. I've got into a cycle now where the salary goes in and pays all the bills through the month and what's left goes into another account and that's my budget for the following month which I save / spend.

Cash ISA for medium/longer term personal savings (instant access or fixed)? Do you review every year and change if better interest is offered elsewhere?

Saving is good. The more 'active' you are in switching, the more likely you are to get a better return (rather than just picking an isa now and forgetting about it).

Cash back credit card - buy everything on it and pay off in full every month? This also offers payment protection on purchases?

Yes. I use Amex and generally get about £200 annually back. (The Amex bill is one of the bills that gets paid before the disposable is taken out at the end of the month - I know it's a bit weird but it works for me).

Credit cards old and paid off - keep open for good credit

Yes.

Do I need to track every individual personal expense in a spreadsheet i.e 20.06.18 Petrol station £1.50 Newspaper?

I use MoneyDance software and download transactions from bank / cc companies. I think it depends on how 'in control' you are of your spending. Using it and tracking everything for a while was really enlightening to see where money was just leaking away on what looked like small things. Why don't you write down now what you think you spend and track every penny for one month and see how it compares at the end of the month with what you thought.

Pension contribution - how much, how often?

Always good to contribute anything in pension as it's topped up by employer and government - free money! Contributing to your workplace pension is a fairly straightforward 'do now'. You could invest in a private pension too if you have enough disposable income. Perhaps take some advice later on as to which is best - for now, just start paying into one.

Annually check energy tariffs, insurances etc - compare and change where necessary.

I've learnt loyalty really doesn't pay when it comes to these. We use Flipper to automatically change us on to lower tariffs for energy. Some people say it's a waste of time, but not in my experience. If your time is limited, I'd certainly review these as often as you can.

Should I have a separate account/ISA containing 3-4 months savings as a contingency/emergency fund?[/QUOTE]

Yes, it's a good idea although I include savings for holiday as part of the emergency fund. It's amazing how many things you thought were emergencies suddenly aren't when you think of sacrificing your holiday to pay for them - we find it from disposable income instead and generally just go without something.

sblondon

So kind of you Sarastro, thank you so much for your thoughts and detailed response, it is much appreciated. Apologies its been a while since I've checked in so only just seen it.

Dobbibill

Lots of good comments already posted about pots, savings, separate accounts etc so I won't repeat those.
The only ISA worth anything IMO is a HTB ISA but this would something for longer term savings, assuming you wanted to buy in the future and were a FTB.
When doing annual insurance quotes, switching energy providers, broadband supply or just general spending consider CB sites like TCB or Quidco. It can mount up quite quickly.