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How do you store/sort your finances

prezzacc
Posts: 147 Forumite

Hi all,
Not the best title, I'll try and explain.
Im intruiged, how do others sort thier finances? For example I've been reading a few posts and people mention "pots" for there money when they budget. A car pot, insurance pot, holiday pot, presents pot etc etc.
While I know we are sensible with our money and live well within our means I wonder if splitting things out would be better. We basically pay into a joint acc, then on payday put a fairly big chunk into our savings and just live on the joint acc. If we have anything big to pay out, car insurance etc we just move it from our savings accounts. So strickly speaking it's not all "savings". I would say 80% of the time we just live of the joint and it seems to work! Anything left over back into savings. In there is an emergency fund for 6 months living, and a "boiler/house emergency etc" fund plus the rest. ( this is a fixed figure I know) the rest then gets moved around many multiple accounts regular savers etc to maximise interest!
Long story but interested to see how other manage I have enough accounts so not sure any more is worth it!
Thanks all!
Not the best title, I'll try and explain.
Im intruiged, how do others sort thier finances? For example I've been reading a few posts and people mention "pots" for there money when they budget. A car pot, insurance pot, holiday pot, presents pot etc etc.
While I know we are sensible with our money and live well within our means I wonder if splitting things out would be better. We basically pay into a joint acc, then on payday put a fairly big chunk into our savings and just live on the joint acc. If we have anything big to pay out, car insurance etc we just move it from our savings accounts. So strickly speaking it's not all "savings". I would say 80% of the time we just live of the joint and it seems to work! Anything left over back into savings. In there is an emergency fund for 6 months living, and a "boiler/house emergency etc" fund plus the rest. ( this is a fixed figure I know) the rest then gets moved around many multiple accounts regular savers etc to maximise interest!
Long story but interested to see how other manage I have enough accounts so not sure any more is worth it!
Thanks all!
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Comments
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Have a look at You Need A Budget. Search the forum - there's a dedicated YNAB thread somewhere
If YNAB doesn't appeal, there are other budgeting tools around. For example MS Money, which a lot of people are still using even though it's been out of support for many years now. Yolt is another app-based budgeting & tracking tool, and there are others.0 -
I don't bother with actual financial pots but I do project a budget for the 12 months ahead. This way, I know that the money in my/our everyday account(s) is enough to meet all normal expenditure. So, my pots exist as numbers in a spreadsheet but the physical money is held wherever it gets the best return on an easy-access basis.
Extra money that isn't needed to meet normal expenses is held in the same way - categorised in a spreadsheet but held wherever gives the best return.
If you are interested in investing some of your savings then that requires much more careful planning - and a visit to a different part of the forum.0 -
The way I envisage doing it is the main account will have salary paid into and any bills eg monthly debits will come out of this (Ill have a savings account where Ill move across a set amount each month for tax, mot and car service), I'll round each bill up and move across whats left to account #2 which will be linked to a credit card I'll use for groceries, petrol etc.
Its a rough idea at the minute, I haven't accounted for a 6 months emergency fund for example.0 -
Great replies thanks. I will certainly do a quick look into YNAB I like the sound of that.
I also very much like that idea Terry. Having a budget and knowing what's what but not actually separating the money out. However I still don't know that would be beneficial? Or if I'm getting my head around it.
Example (these are made up numbers!) I budget 1000 a year for presents, 2000 for a holiday, 500 for car insurance. I save 500 a month (plus any leftover). Total 6k a year... Of that, 3500 I know is for the above 3 categories and anything else is "savings". Christmas comes and I want to spend 200, so I now have 800 left for the rest of the year, so do I just move that 200 from savings and remove 200 from the present budget? Basically keeping me on track.
It seems a lot but probably as I've never really budgeted to that level.
Thanks0 -
I use clear checkbook as it is free and does pretty much all YNAB does. We have an interest paying current account and have envelopes in that with money allocated to them for emergency savings, car, holiday, gifts and house. I also set monthly budgets which get reset at the end of the month. The budgets are direct debits, food, fuel, eating out and entertainment and living expenses. When our income comes in monthly I allocate money to the monthly budgets and the envelopes and both DH and I get personal spending money into separate accounts. Our medium term savings are in Marcus and long term savings invested.I’m a Forum Ambassador and I support the Forum Team on the Debt free Wannabe, Budgeting and Banking and Savings and Investment boards. If you need any help on these boards, do let me know. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing forumteam@moneysavingexpert.com. All views are my own and not the official line of MoneySavingExpert.0
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I dont budget as such, I just try to spend as little as possible (with in reason) and look for areas to maximise income from bank perks & that. Then track it all on MS Money so Ive got a good idea of where the money is going & what my monthly surplus is. I do have a seperate savings account for big annual bills like car insurance. Then I have a load of ring fenced offset accounts for stoozing & that.0
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Good Q OP. I’m also curious.
Seems to me there are different ways of looking at it depending on your situation, ie if you are trying to clear debts, or if you are trying to save.
I have no debts, but would like to use my income more frugally and efficiently.
I have looked at YNAB, but find it overwhelmingly complicated, more than I need, not just a dislike of complexity, it’s just not necessary for me.
My plan now is to devise my own spreadsheet, monitoring income, then tracking fixed costs (eg rent and council tax), allowance for general stuff that costs variable amounts of money (eg groceries, eating out, clothes), and a siphon off to savings.
This spreadsheet will also allow me to categorise every transaction above say £5, so that I can group the spend by category and look over the year at how it pans out, ( and frighten myself to death).
It must be said that I am constantly trying to devise that ideal spreadsheet ...0 -
enthusiasticsaver wrote: »I use clear checkbook as it is free and does pretty much all YNAB does. We have an interest paying current account and have envelopes in that with money allocated to them for emergency savings, car, holiday, gifts and house. I also set monthly budgets which get reset at the end of the month. The budgets are direct debits, food, fuel, eating out and entertainment and living expenses. When our income comes in monthly I allocate money to the monthly budgets and the envelopes and both DH and I get personal spending money into separate accounts. Our medium term savings are in Marcus and long term savings invested.
ClearCheckbook seems to be like all the others, ie it's primarily a register of transactions, with a basic budgeting tool tagged on. You basically set budgets for various categories and use those as limits on spending or see how much you went over or under in each category. But it doesn't do budgeting to zero as far as I can see, and therefore there is no indication of how much unallocated funds you actually have. This is where YNAB wins for me. Of course YNAB is not free, but it does things in a different way to most other financial software.Retired at age 56 after having "light bulb moment" due to reading MSE and its forums. Have been converted to the "budget to zero" concept and use YNAB for all monthly budgeting and long term goals.0 -
carolinerunner wrote: »
My plan now is to devise my own spreadsheet, monitoring income, then tracking fixed costs (eg rent and council tax), allowance for general stuff that costs variable amounts of money (eg groceries, eating out, clothes), and a siphon off to savings.
This spreadsheet will also allow me to categorise every transaction above say £5, so that I can group the spend by category and look over the year at how it pans out, ( and frighten myself to death).
It must be said that I am constantly trying to devise that ideal spreadsheet ...
I devised my own spreadsheet, and it has evolved to quite a complex magic money tree now, tracking everything right down to the stamps in my wallet
Savings are allocated to optimise interest, and I have standing orders set up to keep my main current account, where my salary goes, at the right level, and make adjustments based on my Credit card statements :money:Retired 1st July 2021.
This is not investment advice.
Your money may go "down and up and down and up and down and up and down ... down and up and down and up and down and up and down ... I got all tricked up and came up to this thing, lookin' so fire hot, a twenty out of ten..."0 -
I think there are various good reasons for creating budgets and assigning pots
1. To make sure you're living within your means. Not applicable to this thread.
2 To eradicate the concept of expensive months. Sure there maybe some high credit card Bill's some months say if the car insurance coincides with paying for a holiday but by withdrawing money from the pre-assigned pots, it's not affecting normal spending.
3 To identify what are true savings so you can better decide what to do with them. The money in the holiday, gift pots aren't savings, they're just money put aside for known expenses.
So in the example, £2500 is being saved. But for what? Life's luxuries, home improvements, school fees, retirement? That's what needs to be determined. Now, for some of these, a savings account may well be the right place, in others, it's likely that the money would be better invested instead.
Allocate the savings into their own pots and if you fancy an extra trip to the opera, take it out of the luxuries pot, buy a new sofa, take it out if improvements. Each year, check the previous year's spending and adjust the budgeted savings accordingly. You might find that you don't spend as much on operas as you thought you would so you can put the savings into home improvements instead.0
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