What to do with unspent but budgeted money

ForestBluebells

I have created a spreadsheet showing all my budgeted spend based on my spend last year so I’ve allocated £x to car maintenance for example but had no maintenance costs this month. Do you move this to savings or leave sat in your current account? I have £450 left this month alone from various budget envelopes that I didn’t spend this month but may need later in the year. Being new to budgeting I’m not sure what I should do as it’s earning no interest currently but it’s not “spare” money as it’s budgeted for the year. Sorry if this is a stupid question but I’m confused. Do others open a separate savings account for budgeted but unspent money that you can dip into when needed?

born_again

If you are not going to need it this month and you have a instant access savings acc. Put it in there.

kuratowski

I use a similar system. With a few categories it's obvious - e.g. a bill like insurance that comes up once a year. The way to handle these is with a monthly standing order to your savings account. Then when the time comes to pay the bill you just transfer it back to the current account.

However there are a few categories with irregular and unpredictable spending. You mentioned maintenance; for me, clothes is another as I don't buy new clothes every month it's more like once every 4-6 months. When you have a few months' experience of budgeting you will get to know roughly what how much your "buffer" is and you can choose to move it to savings, but while you're still new at it, the safest thing is to leave it in the current account, otherwise you'll be constantly transferring money back and forth which is a faff.

Another thought, you could always look at switching to a current account that pays interest.

ForestBluebells

Ok that makes sense. I’ll go through and see which are predicable and which are unpredictable and transfer by standing order the monthly amount that is predictable charges and for now leave the unpredictable in my account until I’ve got used to budgeting more. I’ve never swapped bank accounts as it worries me 😬I’ve been with NatWest since I was 8!

Thrugelmir

Build an emergency pot in a seperate savings account. Not having the money available to spend is a good discipline.

tempus_fugit

Why not just put it into savings anyway? It can always be moved out again if and when you need it, as long as it is an easy access account. When budgeting, it often makes no odds where the money for a particular expense actually is, as long as it is budgeted for that is the main thing.

ForestBluebells

I guess it just confuses me having it mixed into my other savings and getting “lost” but i can keep track of what has been moved to savings for different “envelopes” and then make sure I’m trying to not withdraw more than the budgeted amount. Perhaps my spreadsheet is a little confusing

foofi22

Remember your budgeted amounts are not a target. For example, if we spend less on food in a month then we just bank the extra to savings. Of course you could keep it in a separate "pot" if you may want to keep better track of such savings.

penners324

Starling and Monzo (and others) have pots attached to your account where you can move this money. You can name the pots whatever you like. When that bill becomes due just transfer from that pot to the main account (indeed both banks are working on allowing you to spend direct from those pots(

penners324

They allow as many pots as you like. So have 1 for each expected spend.

Bored

I keep all my 'pots' it in my current account, the amount of interest it would earn in easy access savings isn't worth the hassle for me. The only thing I bother to transfer out is my emergency fund into a Marcus account.