What’s your financial setup

Its_just_Barry

Hey everyone,

Looking for ideas as to how everyone has set up there finances? I currently have everything in the one bank (Starling), my salary, bills, saving pots and my emergency fund.

I really want to keep things simple but also want to keep things separate so I don’t get mixed up with things.

How many accounts do you have, banks you use, recommended banks, purpose for each bank and do you use credit cards?

I’m just trying to sort my finances out and would love to hear everyone’s financial setup?!

Thank you in advance 😁

[Deleted User]

This question gets posted here quite often - and the same answers given.

It's foolhardy to keep all your banking with just 1 banking institution for various reasons - simple due diligence answers explains why.

How many bank accounts do i have though ?
4, comprising 2 banks and 2 building society.
These are savings aswell as current.

How many credit cards ?
6.
How many are used ?
1, and that's paid off in full when the statement is received.
It's used for all and any purchases between £100 and £10,000. 

MovingForwards

3 current accounts, over 2 different banks

- came in handy when the visa outage happened and when attempted fraud happened the day I was moving.

8 savings accounts over 3 providers
- each account is for a different thing in my life / future.

2 credit cards
- only one in use as I've not got round to closing the other. Occasionally use the one for the perks.

Malchester

1 current acct (was 2 but just closing Tesco Bank)
4 Cash ISA (1 easy access, 3 fixed term - 2 at 5 years, 1 at 7 years)
2 easy access savings (1 for cash flow and 1 for emergency)
1 fixed term savings account
5 funds through Vanguard
1 credit card paid in full each month

Age 63 so that helps determine spread

SevenOfNine

Lloyds Club a/c x 2 : one is our working bank a/c & all main income goes in there, & the other is emergency/holiday funds/stuff. Fee free because I bounce the required pay-in amount between the 2 accounts.

Nationwide Flexplus x 1 : purely for the insurance (of an age where it's the cheapest place for travel ins, even WITH it's monthly fee!)

Santander x 1 : S/O from Lloyds & main bills are paid by D/D from there & the cashback from those covers the monthly fee. Also has emergency/holiday funds/stuff.

Credit cards: Barclays daily use & has 'cashback' payments, ALWAYS paid off in full each month, Halifax Clarity for holidays, Nationwide (that I need to ditch - never used & limit far too low anyway!)

Debit cards: Lloyds x 2  & Nationwide x 1

Cheque book: Lloyds

9 different savings providers, with 13 accounts between them, mix of ISA's, fixed term & instant access.

Bank interest is so poor it's not the best place to keep emergency/holiday/stuff funds, just the easiest! At least Lloyds give me 6 free cinema tickets for each a/c per year, total worth about £145.

blue.peter

What follows is something that I put together in response to a similar question last year. It's a combination of some suggested rules of thumb and what I do. It is, of course, entirely for you to decide how this fits with your circumstances and attitudes.

1. Don't open an account unless it either (a) meets a defined need, or (b) offers a defined benefit.
2. If an account is no longer needed, or is no longer fulfilling its purpose, close it.
3. The more money you have, the more accounts you'll find you can benefit from. At one end of the scale, you might only need a single current account. At the other (or somewhere near to it), you might find a use for 132 (I've seen a forum member say that s/he has this many.). I'm somewhere in between. IIRC, I have 17, and think that’s a lot. The more accounts you have, the more you need to track. But a lot of the movement of money between them can be automated by standing orders and direct debits. (For example, my credit cards are paid in full each month by DD and my regular savings accounts are funded by standing orders.)
4. Current accounts: I have two, and reckon that this is worthwhile for resilience - one bank might have an IT meltdown, or lock me out for some unknown reason. Both currently pay me interest at a rate higher than I can obtain on an easy-access saver on a certain amount of cash retained in the account. I could, possibly, benefit from the perks and/or additional resilience offered by one or two more, but don't want the added minor hassle. YMMV.
5. Always weigh the benefits of any account (interest, cashback or whatever) against the obligations (monthly fee, minimum monthly deposit or whatever) and ensure that you can meet the obligations. Minimum monthly deposits can usually be met by inter-account transfers. In my case, I have two sources of income and have one paid into each current account. Outgoing payments are divided between the two accounts on a more or less arbitrary basis. There are some DDs and some standing orders set up on each. Even so, I have to transfer some money from one to the other to meet my obligations.
6. A very personal one: don't bank with RBS unless you can withstand the Chinese water torture that they'll give you. They can do this without breaching their Ts & Cs or policies or, therefore, giving grounds for complaint. I had an account with them from July 2019 to May 2020, and found it a horrible experience. YMMV.
7. Credit cards. Always have at least two, one of which should be either MasterCard or Visa and the other should be different. Ideally, these should be not issued by the banks that hold your current account. This is for added resilience. If your main credit card is AmEx (as mine is), a Visa or MasterCard is a necessity for the few places that don't accept AmEx. (I actually have two MasterCards and two Visas in addition to my AmEx. I really don't need five cards, but a couple exist for historical reasons and I have minor personal reasons to keep them all ticking over.)
8. PayPal is useful if you sell on eBay, or for buying online. For example, my local Indian takeaway gives a discount for online orders and accepts PayPal. Using PayPal allows me to pay by AmEx - and so get cashback - when the takeaway doesn't accept AmEx over the counter. So I win twice by using PayPal there.
9. I find it helpful to put all my ad-hoc spending (groceries, clothes, car servicing, garden fertiliser, books, music… everything) on my credit cards, and then pay for it all in one hit the next month. This allows me to keep a bare minimum of cash in my current accounts, and to put anything spare into savings immediately after I get paid.
10. Credit card issuers are usually amenable to altering the card statement date. This can be useful. I get paid at the end of the month. My credit card statements are all dated around the 20th of the month. This means that I receive my statements, and so know how much of my income I’ll have to use to pay them off, a week or so before I get paid. I then have between three days (AmEx) and a couple of weeks or more after I’m paid before the full payment is collected by direct debit. This gives me time to retrieve some money from easy-access savings to meet any shortfall before it’s a problem. In practice, I have a benchmark against which I near-constantly compare my month’s credit card spending. I know that if the month’s spending is within that, I’ll be putting a fair bit of money into savings. Then I have a second, higher, benchmark above which I know that I’ll probably have to do the opposite.
11. Easy-access savings. One account should be enough. Keep an eye on the MSE best buys. Don't be afraid to dump an account in favour of another as interest rates fluctuate. In practice, I find that I do this about every six months. (I actually have two, because they are both linked to a single current account each. One is my main savings account, while the other just holds a bit of cash to tide me over if I have problems elsewhere.)
12. Regular savings. These often offer better interest rates than easy-access accounts. But only use them if you can meet the commitment. If you've got the money sitting in an easy-access account, you can gradually shift it to one or more of these over the course of a year, and then send it back at the end of the year. Rinse and repeat. (I currently have half a dozen, with a spread of start and maturity dates.)
13. Fixed-rate savings. These can give a better interest rate than easy-access, but require you to lock your money away for a fixed period. Only use them if you definitely won’t need the money involved for that period., and think the interest is worth the commitment. (If easy-access interest rates rise during the term, you could potentially lose out.)
14. ISAs. Cash ISAs are generally not worth having at the moment because (a) interest rates, and hence potential tax charges, are very low, and (b) interest rates on ISAs are even lower than for easy-access savings. (Nonetheless, I have a couple for short-term and very personal reasons.) S&S ISAs can be great if (a) you have enough money to make use of them and (b) are willing and able to accept the associated risks.

If you don’t already have personal financial planning software, get some. (Failing that, pen and paper still works. Or set up your own spreadsheet.) Get a program that allows you to schedule future payments (e.g., council tax, utilities, credit card payments) and to look ahead. Use both functions. This will enable you to see, and fix, a potential shortfall before it becomes an actual problem. Conversely, it allows you to see a potential surplus and to tuck it away into savings as soon as you get paid. Set up automated future payments to or from savings as and when you see the need, not at the last minute. (I use and recommend AceMoney, but there are plenty of alternatives. Some are free.)

blue.peter

PS - since I wrote the above note, eBay has stopped allowing PayPal. It's therefore less useful now.

eskbanker

blue.peter said:
If an account is no longer needed, or is no longer fulfilling its purpose, close it.

It doesn't do any harm to have spare surplus accounts around in order to be able to take advantage of switching offers, although I suppose you could argue that in itself that's a purpose for retaining them!

blue.peter

eskbanker said:

It doesn't do any harm to have spare surplus accounts around in order to be able to take advantage of switching offers, although I suppose you could argue that in itself that's a purpose for retaining them!

Yup, that's exactly what I would argue!

colsten

blue.peter said:

If an account is no longer needed, or is no longer fulfilling its purpose, close it

Yes and no. .

If the account doesn't have a charge, it may well be a good idea to keep it, with a minimal, or zero, balance. Even if you can't see a purpose at the time.

Case in point: years and years ago, I had an Egg savings account which initially paid a great interest rate. Then Egg folded, and YBS took over the account. Ever since, it has paid a derisory interest rate so had no obvious purpose but I am glad I retained it even though I could see no immediate purpose for it. It's now probably my most valuable savings account, even though I only keep a minimum balance in it: it allows unlimited numbers of Direct Debits, which has been a major godsend for several years now (multi-current accounters and serial switchers will know why 😀). More recently, it also gave me access to the members-only 3.5% YBS Regular Saver, which takes up to £500 a month, and is the market leader by a massive margin. That 'useless' account has effectively made me several thousand over the years.

Keeping some dormant current accounts can be profitable for those who want to / can go for switch incentives.

A longstanding current account, even if not used, also has a very positive effect on your credit worthiness, as lenders look for stability.

My take would be: if in doubt, keep the account dormant. Obviously, do keep an up-to-date record of your accounts and login information.



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Regarding the OP's question: I don't think there would be much mileage in me explaining why I have in the region of 70 current, savings and investment accounts, as nobody's circumstances and requirements will be the same. I would only recommend, quite strongly so, not to put all your eggs into the same basket, i.e.: do not have all your accounts with a single bank. For starters, no bank is always the market leader, and many do not have a full range of products. In addition, you could find yourself in serious financial difficulties if anything goes wrong with that single bank. I would have at least two current accounts, with different financial institutions, plus at least two credit cards (1 x VISA, 1 x Mastercard) from whoever has the best credit card offer. Goes without saying that credit cards should be paid off in full each month, unless you are stoozing/financing with a 0% card that you pay a minimum amount a month, and pay off in full when the 0% period ends.

In addition, I would have one or more savings accounts, plus an investment account for my S&S ISA, as well as potentially an investment account for a SIPP. For savings and investment accounts, current account providers are typically not your best choice, so you would hold them elsewhere.  Bottom line: forget the "my bank" notion, and replace it with a "my finances" notion.

blue.peter

colsten said:

blue.peter said:

If an account is no longer needed, or is no longer fulfilling its purpose, close it

Yes and no. .

If the account doesn't have a charge, it may well be a good idea to keep it, with a minimal, or zero, balance. Even if you can't see a purpose at the time.

I see where you're coming from, and sort of agree a bit. But I'm in exactly the same position with you as I was with @eskbanker 's point: I'd argue that "it might be useful in the future" can be a valid purpose. Anything that works for you is.

The point I wanted to make is that you should be able to justify to yourself what you're doing. There's nobody else who needs to know your reason, let alone agree. I'm merely advocating thinking about and understanding one's own choices. If "it might be useful in the future" is a good enough reason, in your opinion, to keep an account going (including any resultant work, such as monitoring), then that's good enough.