Saving Pots

Desperadoo

When I first came to MSE almost 20 years ago I used saving envelopes and put money in each week toward things...birthdays, car, days out,  appliance repairs and a few more.

Now back again and using " virtual pots"

How do you do yours...of you do ?  Cash or virtual ? How many do you have ? 

How much do ypu save towards each ? Trying to get idea what I should be doing 

MovingForwards

I tend to have different accounts, only one has pots.

Current account (CA) 1, wages in direct debits / monthly bills out.

CA2, petrol and study costs.

CA3, emergency fund for leaks etc.

CA4, car repairs, MOT, insurance, home insurance.

Savings account (SA) 1, mortgage emergency fund in case of loss of job.

SA2, bills EF in case of loss of job.

SA3 - 6, property maintenance, upgrades, furniture replacements, ERCs, moving up the ladder deposit.

I also have 3 months of tinned / dry food in my kitchen.

I find it easier to have CA's for things I know a debit card will be better to pull out and use. From all my accounts only two don't pay interest, the rest pay 0.30 - 3.25%; the higher the interest, the more long-term the funds are for.

It worked for me while clearing debt, saving for a mortgage deposit and since buying a home.

Now I occasionally slip money into premium bonds and pay into a SIPP monthly, while overpaying the mortgage (sub-prime lender).

Two things I did when starting over was keep an annual budget and move money to savings on payday and treat it as another bill. I still do it now.

Birthdays I pay less into savings that month, Christmas I start buying in September and again pay a bit less into savings each month.

I save a third of my income across everything, but I don't have kids.

Each person is different, aim to save a bit each month, see how you get on and if you find you've more left payday, move it to savings.

MovingForwards

When I made my run to be debt free, I had a dedicated bank account to pay the debts and build up money to make offers to clear them.

Due to budgeting I knew how much money I needed for food, travel and bills.

Each Friday I would draw out £x and food / travel pass etc was paid in cash, if I didn't have the cash due to spending it was tough. However, paying in cash I saw money leaving my hand rather than a beep of my debit card and a number on the screen.

The first week I had a bit leftover, the following week I had more and only took enough to bring me up to my £x budget, the following week I took out even less to bring me up to £x.

Due to spending less, I would move the leftover money, I'd not have to take out, to savings each week.

I'm starting to move back to using cash, for me it's more controlled.

Hope the two posts help, together with suggestions from others. You'll find a way that works for you.

KxMx

SA1: Long term goals
CA1: Main day to day transactions 
CA2: Starling Bank, short term savings goals + 3 virtual pots (currently) for rent, energy and moving costs.
Pots added/subtracted as needed. 

Frogletina

Over the years I've used pots in various ways.

When I was younger, I had pots for rent, electricity, food, insurance etc - all filled with cash weekly

I now use virtual pots within a budgeting app.

For me, my percentages are as follows - I have 4 main categories, with sub categories as follows

All essential living costs - separate pots for each bill, groceries etc, work out now to around 50% of my expenses 
Holiday costs are 30%
Personal spending, entertainment, books, media, medical, clothing is 10%
Gifts, eating out, days out, birthdays and Christmas is 10%

I personally don't drive, but if I did I think I'd have a separate category for that to include running costs, tax, insurance, fuel, repairs and building up money for a replacement vehicle in the future

But everyone's percentages will be different dependent on their circumstances. When I was younger I was on a very tight budget and every penny was needed and spent

Now I am retired, I'm in very different circumstances

However, I still account for every penny in my budget.

enthusiasticsaver

We have pots within savings accounts for  house/car/holidays/gifts.  Not  a separate savings account for  each though and I swap between them.  Living costs for eating out, diesel/travel expenses, food and direct debits come out of current account.  Personal accounts are for things like clothes, hobbies, hair etc.  Our budget is not as tight as  it was years ago though. 

MEM62

We have a joint account for household bills which is over-subscribed so we are consistently building an excess. The excess covers some of the maintenance & redecorating etc.  Outside of that I put £250 a month into a S&S ISA and have done for years.  That pot (currently circa £47K) has no particular assigned purpose but I have made withdrawals once in a while towards a new motorcycle or car.  I then put £200 per month into the 'vehicle fund' - this covers the running of my car and any excess that builds up goes towards replacement.  I also have a 'slush fund' that I put £500 a month into that covers holidays and general fun money expenditure.  I also used to budget my pocket money by using cash.  However, since a lot of places stopped taking cash during the height of the COVID restrictions I now use by debit card more often.     

Brambleberry

We have virtual pots on a spreadsheet, one for joint and one personal. Each spreadsheet covers roughly 10 pots held across 2-5 accounts, including current accounts, credit cards and savings, but we don't have multiple current accounts for this purpose.
We operate a zero sum budget, allocating all of the pay to the different categories as soon as we are paid. In general a minimum of 1/12 of the estimated annual spend per category is rounded up a smidge, and paid to each pot. All spends are then deducted from the pots accordingly.
I have a dashboard page where I can see the totals of all the different pots and also calculate annual expenses and how much each will cost monthly. 
There is a small surplus in each of the accounts and in the early days, there would be negative balances in some of the pots as we gradually built them up, although there was enough in others to off-set the total when some bills happened earlier in the 12 month cycle.
As to how much we save, everyone is different and I'm not sure my amounts would be much help to others but through using this system consistently since 2014, we have cleared our mortgage early, become debt free, taken out a car loan (0%, but extenuating circumstances) and then recently paid that off. In a very good month, we could save about 20% of my take-home pay.
The most important lesson from this process is that knowing where we are, what we can realistically afford, or how long it would take to save for something has made our financial lives much more peaceful. 

Jami74

Separate accounts for different pots, although now that Chase is paying 1.5% on up to 10 easy access savings accounts most of my pots have been moved there. I love having them all visible in one app. 

My first ever pot was for Christmas after a payroll error one December. Every year now I open a regular saver and contribute a set amount each month, so there is money for Christmas regardless of what else happens. 

The next pot I set up was my car pot, £100 a month covers tax, insurance, repairs and MOT, no more sinking feeling when one of those bills is due. I have a pot for work related expenses and one for birthdays. I have more recently added a holiday pot, although this is first to go if money is tight one month. 

I've also added two savers paying 3% on up to £1000, one for emergency pet bills and one for phone/tablet replacements.

It has taken time to get in a good place with budgeting because for a long while income did not exceed basic outgoings by very much.

Whitewitch777

June 2023. Can you say which Banks have accounts that have the "pots" or "jars" facility please, as I am having trouble replicating the one we currently have with Intelligent Finance (was St James's Place part of Halifax I think) which has decided to close. Need to move urgently - thank you!

overspender22

Whitewitch777 said:

June 2023. Can you say which Banks have accounts that have the "pots" or "jars" facility please, as I am having trouble replicating the one we currently have with Intelligent Finance (was St James's Place part of Halifax I think) which has decided to close. Need to move urgently - thank you!

Starling, Monzo, Chase, TSB are the ones I know of. Starlings’ interface in my opinion is the easiest to use / smoothest experience. 

While chase lets you assign the debit card to a particular pot and change whenever you like which is handy. Plus interest.