Saving stategy/psychology

waterman10

I was wondering whether people have specific savings pots for a new car, holiday etc ?

I've never done that personally - i've always just saved money in one savings account and then drawn money out when I've needed it for things like that.   But I was wondering if it would be a good idea to have different pots.

For example, when my car eventually gives up the ghost and I'm looking for a another second hand one, if I had assigned a pot for this, I may be mentally more prepared to spend a bit more and get a slightly better one.  Whereas, If I'm just drawing money out of my one savings account, I may be more inclined to spend as little as i can so that I don't see a huge dent coming out of my one savings account.

I just thought it was an interesting question and wondered what other people do.

masonic

I take advantage of high rate regular savings accounts, where the monthly deposit limit is generally small, so I naturally have savings maturing throughout the year in pots of a few thousand each (smaller amounts could be saved in these accounts if desired). They aren't usually earmarked for anything in particular, but they could be. Beyond that, using a single savings account that supported pots would mean compromising on interest rate, and I wouldn't want to do that for psychological reasons.

Albermarle

I think it suits some people to do that, but not others.
Just do what suits you.

thegentleway

My savings are in one account where I can get the best interest rate. I do the different pots with a spreadsheet. 

BridgetTheCat

I have a main savings account (ISA) and a few small pots for specific projects like my holiday and pet expenses. It’s mainly psychological but also practical. There’s an interest penalty for withdrawing from the ISA.

clairec666

I have a similar approach to masonic. I've got quite a few regular savers on the go, and one of them is due to mature in the month before I'm moving house, so I've decided to use that particular account for my new furniture purchases. I'm a bit of a second hand / antique addict, and often succumb to temptation when I see something I like but don't really need, so hopefully setting myself a spending limit will help! The rest of my savings aren't for anything in particular, but I guess if I had one that matured in the summer I could make it my "holiday fund" and purposefully save towards that.

Archerychick

I maximise returns on savings, but allocate its purpose in a spreadsheet. 

aroominyork

Some years ago I did this and found it very useful. Each month I put an amount from my salary into a separate savings account for annual bills over a certain amount - things like house insurance, TV license, pet insurance (expensive!) and car service, and a separate wad for holidays. It meant that I could spend the balance on day to day living, without worrying that a sudden bill would send me into overdraft.

TheBanker

clairec666 said:

I have a similar approach to masonic. I've got quite a few regular savers on the go, and one of them is due to mature in the month before I'm moving house, so I've decided to use that particular account for my new furniture purchases. I'm a bit of a second hand / antique addict, and often succumb to temptation when I see something I like but don't really need, so hopefully setting myself a spending limit will help! The rest of my savings aren't for anything in particular, but I guess if I had one that matured in the summer I could make it my "holiday fund" and purposefully save towards that.

I have a similar approach too, I will earmark certain RS accounts for certain things, but am happy to spend them as I save from my income so I know the money will be replenished. I will occasionally use 0% credit cards if I want to make a big purchase before I have a saver maturing.

I really don't like drawing from my ISA because, although it's flexible, I would have to replensih the money within the same tax year to avoid loss of my allowance. And especially with the current speculation about the future of cash ISAs, I'd like to use as much as I can this year. 

Jami74

waterman10 said:

I was wondering whether people have specific savings pots for a new car, holiday etc ?

I've never done that personally - i've always just saved money in one savings account and then drawn money out when I've needed it for things like that.   But I was wondering if it would be a good idea to have different pots.

For example, when my car eventually gives up the ghost and I'm looking for a another second hand one, if I had assigned a pot for this, I may be mentally more prepared to spend a bit more and get a slightly better one.  Whereas, If I'm just drawing money out of my one savings account, I may be more inclined to spend as little as i can so that I don't see a huge dent coming out of my one savings account.

I just thought it was an interesting question and wondered what other people do.

I did (fell apart a bit with buying house and cash flow interruption) and I found it much easier to take money for car or Christmas or holiday out of the relevant pot than out of savings.

waterman10

thanks for the replies.  Always interesting to hear how other people do things.