my Direct debts

Bendy1224 · 16 August 2018 at 2:18AM

hey all, not sure if anyone can help me on here fairly new to me all this money stuff, I am really struggling to know when to set my DD (direct debts) dates. I get paid from one source of income every week, then another income is every 4 weeks. i have already set up 2 current accounts, one for all direct debts and bills, then another for extras like, food, clothes, fuel for car etc. this is really giving me a foggy head. also I'm wanting to take a car out on a PCP, but not sure if its affordable? I suppose if I take my bills from my income coming in and I have left overs then I can afford it? am I right? really sorry to all the people coming in and not really understanding what I'm asking. anyone not sure what I'm asking please ask and Ill try and re word it in a better way .

FrugalShaz · 16 August 2018 at 6:14AM

Hi
What you really need to do is do an income and expenditure sheet. Know how much need to go into your account every month to cover bills. The fact that you get paid weekly means that you need to work out how much you need to transfer to live on such as food, clothing etc each week before say...eg 1st of every month. The fact you get 'other income' every 4 weeks means in theory you get paid 13 times a year...usual direct debits can be set up anytime except your council tax as these are set dates such as 1st, 15th or 25th...most of my dd's are set up 1st!

As for other accounts..I would have all your money paid into one account then transfer a set amount into other accounts. That way you don't need to rush to transfer money in time to avoid charges etc if you were on holiday or couldn't get to the bank or online banking etc.

I used to get paid every 4 weeks and use to base my wages on this per month, then I would have an extra payment at some point of the year which was very useful. As for buying a car, if you are just starting out I with accounts etc, I would hang on if you can so you get regular income and dd's covered, after a few months it should all start making sense then can look at further expenses such as a car.

Robin9 · 16 August 2018 at 7:06AM

You are not alone in getting paid every 4 weeks. My State Pension works like that and once you get used to it it is very straight forward. All my DD's etc come out of the bank account that this goes into.

Sit down and work out what goes through your accounts in a year - don't forget the annual insurances, the council tax that only has 10 payments, the water rates every 8. You will have some months which are very expensive when some of these come together.

soulsaver · 16 August 2018 at 10:57AM

We know you're new, so fyi - they're Direct Debits, not Direct Debts

LXdaddy · 17 August 2018 at 7:12PM

Is the amount you get paid every week and every 4 weeks regular? If it is then I would take 4 * weekly amount plus the 4 weekly amount and use that as a "monthly" income number. You'll then have one month a year when you get a bonus payment.

You need to do as others have said and work out how much you spend every month and take that away from how much you get income every "month" to see if you can afford an extra expense like a car.

As to deciding which day of the month to have as your direct debit payment date... if you have enough income it doesn't matter. If you've got enough in the bank on (say) 1st of September to pay all the bills you need to pay during September then when ever they are paid you'll be OK and by the 29th of September you'll have enough to pay all of October's bills. By the time you get round to September next year, you'll have had 13 lots of income and 12 lots of bills and you'll be able to save the 13th sets of payments.

Terry_Towelling · 17 August 2018 at 8:15PM

What follows isn't really a direct answer to your question but it might form part of the answer for you.

I don't know how you feel about credit cards or how disciplined you can be using one but you might be able to streamline things a little if you used one.

The idea is that anything you can put on the card (petrol, food, clothes etc), you should do. This means that all of that expenditure can then be paid by a single DDr at more or less the same time each month.

It's not a solution to budgeting (which you still need to do) but it can make things easier to manage if you know that lots of monthly stuff is going to go out on a single date - and it will be a month later because you usually get a good period of time between getting your credit card bill and having to make the payment. This also creates a bit of a cash buffer as the expenditure that previously was going out in dribs and drabs throughout the month can just sit in your account for up to a month longer. This should help with the paying of the other DDrs given the 'erratic' nature of your income.

You need to be disciplined with a credit card and always pay in full by DDr every month - no excuses. You might even get a cashback credit card to help.

Dobbibill · 17 August 2018 at 10:49PM

Hi - welcome to the forum.

If you are paid 4 weekly to budget on a monthly basis you would need to take your income x13 /12 to give you the monthly equivilent.

Complete a SOA - this will help you to account for everything.

If you are using a bills account you will need to start with a decent buffer.

The are some good budgeting templates here which may help (the personal budget is quite good) https://www.vertex42.com/ExcelTemplates/budgets.html

Bendy1224 · 19 August 2018 at 8:17PM

Thanks for all your messages, much appreciated.

So with being paid every 4 weeks is it possible to set same date every month for Direct debts and to have enough money in bills account for going forward through the months??

With my accounts I have noticed someone posted regarding it further up in the posts to have all money going to one account, then to distribute the correct amount for bills. I basically have 2 different sources of income, one going to bills account which one pays every 4 weeks into the account and the other pays every week. Is this making it tricky to manage having it like this??

Then I have my work wages which goes to my account for spending on clothes, fuel, food, something I might want that month . The problem iam having is I dont no how much to take from my bills account when get paid as have more left over money when I deducted bills from total income, but suppose need to have enough in the bills account for bills coming out in further weeks. Think ive set it up messy have all my DD (direct debts) coming out at different dates..

Any ideas what I should do ?

Hope my post makes sense lol

Thanks again

Ben

Terry_Towelling · 19 August 2018 at 8:56PM

OP, do you know what your bills come to each month? There may be some variable ones, I understand that but you must be able to add up the fixed ones and make a reasonable estimate of the others. You then just need to make sure that there is enough money in your bills account at the start of each month to cover them all.

Once you've got that established you can start working towards refining the process.

To be honest, if there is only you involved, why do you have to have two accounts? If you only had one account, there wouldn't be any issues with worrying about how much to transfer where and when.

I still think you should have a credit card for all the variable stuff and have that paid by DDr for the full amount. That way, all/most of your variables will end up going out in the same DDr to the card company on a reasonably static day each month. That will also create a cash buffer for you as the card bill doesn't get taken until around 28 days after the bill comes in (depending which card company).

Bendy1224 · 19 August 2018 at 10:54PM

Hi Terry, thanks for your message.

I do have a credit card ive recently just used it.

When it comes to my bills tho would you say to set the same date every month for my bills to come out then I know whats rest of my money in bills account I can take . Hope this makes sense. Also would you set the source of income I get every week to every 4 weeks like the other income thats coming into bills account??

Ben

Westie983 · 20 August 2018 at 3:41AM

Bendy1224 wrote: »

Hi Terry, thanks for your message.

I do have a credit card ive recently just used it.

When it comes to my bills tho would you say to set the same date every month for my bills to come out then I know whats rest of my money in bills account I can take . Hope this makes sense. Also would you set the source of income I get every week to every 4 weeks like the other income thats coming into bills account??

Ben

Hi,

You have a couple of options you can work out how much you need for each bill each week to cover the DD taken at the date you have chosen (if you have an option) or you can work out what the total of your monthly bills is as make sure over the four weeks you put enough in from both incomes to cover the DD, or the final option is to work out which of the DD comes first and work out how much of the first income is needed to fund which ones that are paid before you get your second income, that way you dont need have all the bill money at the same time.

Keeping the money separate and budgeting for each bill will mean either you have just enough to cover them and whatever is in your other account is for you to spend, or you can put all money to cover bills in the bills account, set all the bills to go out on the same date and then whatever is left over in the account is for you to spend.

Totally up to you which option, might be worth working out your bills into weeks, so you know what needs to be covered with what income you have, forward budgeting and if you end up with just monthly income you can continue with this option and know your bills will be covered when you are paid, as you know how much you will get against what you are paid.

Westie983

my Direct debts

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