Do you divide your wages immediately?

kimwp

As a graduate, I started off my "financial journey" by setting up a regular saver to take money out soon after I got paid, I think your best options for this at the moment are your LISA for house buying/retirement and one of the 3% regular savers. Whatever I didn't/don't spend by the end of the month above a buffer, I skim off into easy access savings accounts. Whenever I got a pay rise, I increased the amount that I saved.

Recently, I shifted all my direct debits to go out on the same day a few days after payday to simplify my tracking of everything.

I've never used pots as I started off saving quite aggressively and spending quite cautiously so had the money to spend on the bigger spends when they came round, leaving quite a bit to build up over time for a house deposit. 

enthusiasticsaver

There are many ways of budgeting so you need to find a way that works for you. If you want a pots system Monzo and Starling have a way of separating the money into pots in the one account. Personally we just have one joint account for bills, food shopping, eating out and household expenses. All direct debits come out in first week of the month so after the 8th we know that whatever is left is available to spend. We do monthly standing order to our personal accounts and standing orders to our two savings accounts which are for holidays, car and house expenses and gifts. We don’t separate it into separate pots though now. 

Coveredinbees!!!!

Start a pension, the earlier you start the more time it has to grow.

CheeseDreams

Leave what you need in your current account to cover bills/direct debits etc. Get a cashback credit card for food shops, clothes, insurance, travel etc. You're gonna be spending the money anyway, best to get free cash from it!

Every pay day you pay off the credit card. Whatever is in your current account that doesn't need to be there goes to savings. If you are regularly dipping into savings to pay off the credit card you need to look at your spending.

It helped me! 

IvanOpinion

kimwp said:

Recently, I shifted all my direct debits to go out on the same day a few days after payday to simplify my tracking of everything.

I did that years ago and found it really made my ability to budget much simpler. I get paid at the end of the month and all my DDs leave my account on the 2nd of the month.

NatashaRyan

There are so many ways to do it, it depends on what works best for you.

Personally, my advice would be to have three accounts: a spending account, an account for bills to come out of, and a savings account.

Sit down with a pen and paper, and write down exactly what your monthly outgoings are, including a food budget. This is your outgoings.

Deduct this amount from your monthly wage, and you'll see how much you have left over. From that amount, decide how much you want to reserve for day to day spending (petrol, meals out, clothes, fun activities), and how much you'd like to save. 

On payday, you move your outgoings sum into the bills account (make sure every direct debit is from there), move whatever you want to save into your savings account, and keep the remainder in your personal spending account. You then know everything you need to pay is taken care of and what's in your personal spending account is yours to play with. I tend to mentally keep note of where I am in the month and how much I've spent with that account, to make sure it's very roughly 25% being spent each week.

I have a fourth account which is just a spare one I use to transfer my food budget into at the start of the month, then when I go grocery shopping I move the money across from there to the account I bought the groceries from. It helps me mentally to see how much I have left for groceries for the month but some people don't differentiate between grocery budget and personal spending.

Once I did the sums, I made a short 'on payday do this' note on my phone and when payday arrives I go through it step by step, for example:

1. Transfer 400 into food account
2. Transfer x amount into savings
3. Transfer x amount into spending account
4. Check bills account has x amount leftover

It sounds like a lot of work but figuring out outgoings and a reasonable food/spending/savings divvy for the remainder of the money is a one time thing which only needs to be reassessed if something changes. If additional money appears, I decide consciously what to do with it. I also keep a buffer in the bills account of a couple hundred and once that buffer gets too high, transfer some of it across to savings.

Hope that makes sense, if not let me know. Many other ways to do things but I prefer to keep it simple.

robatwork

IvanOpinion said:

All these 'pots' only make life complicated. I see the younguns in work spending hours with their fancy apps moving 50p from pot A to pot B because they have overspent on gerbil food but underspent on multi-coloured socks. Split your money to chase deals and best interest rates - not specific purposes, and ensure money is available when it is needed (i.e. do not put it into a 5 year scheme if you need it next year).

In "our" day socks didn't matter so much. Now the "younguns" buy trousers that end 10cm above the ankle, sock etiquette is proving more important. Of course there is a particular breed that pairs these strides with no socks and tassel loafers, blissfully unaware of the corner of hell that awaits. 

callum9999

Rob5342 said:

anotheruser said:

I don't bother with "pots" for this or that - to much work (yes, even to set up in the beginning).
I just get paid on a set Friday, on the following Monday Standing Order some to a savings account and the rest stays in my account for me to pay bills.

I understand others prefer to split stuff up but I am simply too lazy for that as I see no gains over my current system.

How do you keep track of money you have available to spend vs money you need to keep aside for when the direct debits come for the bills?

In my head - don't most people do that? I'd imagine the people on this forum would be more highly organised than the average person, whether that's because they have an interest in financial planning or have recovered from debt issues.

Though as someone who doesn't live paycheque to paycheque (I'm not remotely wealthy - just don't spend much!), I guess the consequences for forgetting something are generally far less severe.

phillw

Rob5342 said:
How do you keep track of money you have available to spend vs money you need to keep aside for when the direct debits come for the bills?

I moved all my direct debits to the start of the month as it makes keeping track much easier.

However, I would not consider thinking of the rest as "available to spend" as you have no idea what your situation will be like in subsequent months.

Rob5342

callum9999 said:

Rob5342 said:

anotheruser said:

I don't bother with "pots" for this or that - to much work (yes, even to set up in the beginning).
I just get paid on a set Friday, on the following Monday Standing Order some to a savings account and the rest stays in my account for me to pay bills.

I understand others prefer to split stuff up but I am simply too lazy for that as I see no gains over my current system.

How do you keep track of money you have available to spend vs money you need to keep aside for when the direct debits come for the bills?

In my head - don't most people do that? I'd imagine the people on this forum would be more highly organised than the average person, whether that's because they have an interest in financial planning or have recovered from debt issues.

Though as someone who doesn't live paycheque to paycheque (I'm not remotely wealthy - just don't spend much!), I guess the consequences for forgetting something are generally far less severe.

I have 24 direct debits and would have trouble keeping track of them all in my head, I find it much easier if the account takes care of it for me. I've got all my bills money in a bills pot and weekly budgets for each upcoming week in their own pots, so all I have to think about is making the current balance last the week.