Best way to budget

datlex

!!! wrote: »

Are you saying you want 5 accounts?

That’s a bit OTT

5 is actually relatively few compared to some folk. For the OP's situation I would look at 8 accounts or more. The 5 mentioned plus 1 for income and 1 each for personal spends. I think you either need to have just 3 accounts- spends, bills, savings or to sub divide those up.

trailingspouse

There are a couple of things to sort out first.
1) is your partner on board with this? What's their opinion? How would they like to organise the money? You need to be in agreement for any sort of budgeting to work.
2) keep a spending diary for at least a couple of months. This is where using a credit card or debit card for every single purchase is really useful - your statement effectively becomes your spending diary. Go over it (together) - not to apportion blame or to see who spends the most, but simply as a fact-finding mission to see where all the money goes.

I've never really seen the point of keeping several pots for different types of outgoings. I mean, if you're on your way to work and you need to fill up with fuel, but the 'fuel' pot is empty (and there's money in the entertainment pot, say), are you really going to ring work and say 'I can't get in today, I don't have enough money to fill the car up'?
I keep all of my money in an interest-bearing current account, and use a spreadsheet to track what I spend month to month. I can see very quickly how much I'm spending on fuel, or meals out, or house insurance etc etc etc, and can take corrective action if I need to. I also have another spreadsheet with a projection of where things will be financially over the next year, assuming everything stays as it is. It makes interesting reading. I can update it if, for example, I get a better deal on my car insurance, or cancel my Sky packages - and immediately see what effect that'll have over the year. And I can play around with it - what would happen if...

southantrim3

This is how we currently manage our cash flow - it may change in the future but for now it works.

One joint account were our salary goes in at the end of the month. All direct debits are scheduled to go out a couple of days later at the start of the month so we know what's then available.

Then each of us take out pocket money from the joint account to keep our personal spends going for the month.

After that we have a few pots, might set up more though - one for oil, holidays, presents and savings.

The above so far works pretty well and I might set up a few more pots for the likes of food, petrol etc which currently come out of the joint account.

Hope that helps. :beer: