Best way to have 'pots' to budget from?

jignator

Hello all, hoping someone has tried to do similar and will be able to advice - I have done a bit of my own research too. Essentially, my partner and I are soon to be living together and will need a joint account for bills etc. However, our ideal is to have three different pots - bills, food and household and leisure so that for example each month we can put in equal amounts of money into each 'pot' and then we know what it looks like for the month and the year - the run rate and how much we should be spending in any given month. This may be overkill for some but it is how we envision managing our money so just need advice on what is the best way to execute this please. We thought we will create three joint accounts under one bank and then be able to manage in one bank/app for the three pots and that may be easiest. Looking at monzo, their 'pots' are not for what we want to do I think - does anyone know different or have any other ideas or other digital banking apps to consider? We don't want pots to save money as such, all three pots will very much be used on a weekly and monthly basis. Thanks in advance!

getmore4less

Why bother with physical pots just use a spreadsheet or other tool and have virtual pots if you need them

Proper budgets plan the spending in advance, not look at account balances and guess.

colsten

jignator said:

……and how much we should be spending in any given month. 

Did you really mean to say this, or do you mean your pots/separate accounts will help you not to overspend in any given category?

If the latter, ok. Though the likes of Monzo or Starling do assist you with budgeting, and/or you could use a proper budgeting app like YNAB, Yolt or Emma to build and control your budget. Or simply a spreadsheet, as suggested above. A proper budgeting app would, IMO, be the best choice, though. 

If the former, you need to have words with yourself.

colsten

Also worth a read: https://www.moneyadviceservice.org.uk/en/articles/joint-accounts

IvanOpinion

Having been down this route many years ago, I agree with getmore4 less ... use a spreadsheet.  By separating the physical money from how you manage the pots it means you don't have to divvy things up, create loads of accounts/pots/whatever and move stuff around the place - life is far too short for that.  It also means that you can use the physical money to chase deals, incentives etc.

jignator

Wow a lot of people not liking the idea, life is too short for separate bank accounts with money automatically going in but not for a spreadsheet you have to manually update? We already have a spreadsheet so know how that works. My question is not for advice on our tactic but on what platforms help us to do what we plan to do, thanks though. If anyone out there uses monzo or another digital banking app, please let me know! 

MovingForwards

I don't do it for day to day spending, but have separate pots for annual bills eg everything to do with my car and home insurance is in one current account, plumbing / gas emergency is in another current account, interior upgrades, structural repairs, EF to pay mortgage, EF for bills / food etc are all in different savings accounts.

colsten

Not very constructive to throw a stroppy if people take the time to respond to your post, sharing their experience and knowledge for free. I'll try again, but if this is my last post in this thread, you know why.

Lots of people on this forum, incl myself, use Monzo, and other banking apps. Some, incl. myself, use different accounts for different purposes. However, I do not use different current accounts to help with budgeting as I am strongly of the view that budgeting is not the domain of a current account. I also want to be able to switch my current accounts without losing my budgeting capabilities and history. A spreadsheet is fine for some people but would be way too laborious for me as I have many dozens of accounts, so I am using a ready-made budgeting tool called AceMoney. However, if you are only starting out, and if you don't have investment accounts (which you haven't mentioned, so I assume you don't have/need any), one of the more modern apps, like I mentioned above, seems more suitable. 

Some people here also use joint accounts. I don't personally as I don't have a need for a joint account, and I prefer not to have the complications of a financial connection on my credit files. Every bank offers joint accounts, and most banks have a limit to how many current accounts you can have with them. For instance, between the same two people, you can only have one joint current account at Monzo and at Starling. Other providers might let you open more than one joint account but this will mostly be complicated or even impossible. As a general rule, not having all your accounts with the same bank is a great idea, anyway, as if something goes wrong with one of them, you don't want to be stranded without access to any money.

All current account providers have banking apps.

jignator

I am sorry if you read it as stroppy, I simply responded to the comments who suggested I need to re think everyone and judged on the method I chose to budget when I clearly said we simply want advice on how to execute what we have decided. If I read your post again, 'you need to have words with yourself' is not very constructive, I am sure you will agree? Thank you for your time in responding though! Hope you can see how your post can come across now and if you decide to post elsewhere, you may take that into account  

jignator

MovingForwards said:

I don't do it for day to day spending, but have separate pots for annual bills eg everything to do with my car and home insurance is in one current account, plumbing / gas emergency is in another current account, interior upgrades, structural repairs, EF to pay mortgage, EF for bills / food etc are all in different savings accounts.

Brilliant, thank you for your helpful comment. Great to hear a solution or experience without the added judgement 😂 good idea on the emergency account too! Interesting, noted.

gsmh

I use Money Manager EX, a free finance app for Windows and Mac, and I create an account for each 'pot' I need. All I do is transfer money into it from my main account, but never mark the transfer as reconciled. When I need to use the money, I transfer what I need back the main account and then it is available to use. By not marking these transfers as reconciled, the reconciled balance of my main account will always tally with what my bank says and the overall balance will be what you have, minus the pots. It is so much easier to do than to explain.