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Could someone who is good at managing money critique my plan please(9 Posts)
So we have managed to clear our debts bar the mortgage and a car loan. We have a chance to start with a clean slate. We have always been crap with money and lurch from one month to the next scrabbling around to pay for things so want to get into good habits.
My plan is:
One account for all the DDs to come out of (both salaries to go into this account
One account for us to spend money from for food, fuel, clothes etc(an amount will be transferred every week from the DD account)
Money will also be transferred into Savings accounts for:
Short term savings/emergencies
We already have £15k offset against our mortgage and would add to this each month as long term savings.
We both have decent work pensions too.
How does that look?
Is there anything else I haven't thought of that we should put money aside for?
We do this but take it a step further and have a house spendin account for kids stuff/food/house expenses like dIY. Then a personal spending account each for travel to work/clothes/lunches/evenings out. It's nice to have some money separate. And it means that if I decide to save up for eg a new winter coat, DH doesn't spend it on beer!
Another thing I do is look back over the previous years bank statements for big ticket items like car insurance and other one off items eg energy bill for Jan/Feb/March so I can manage the cash flow for those items. We have a couple of annoying big things that we forget about like resident parking permits/jewellery insurance which are a bit out of the ordinary. If you review your spending then you should catch most of them and can then put money aside to cover
Thanks. We did have personal accounts too at one point but DH is really really bad with money and ran up a huge overdraft and had DD's bouncing all the time so once we'd paid that off we both agreed to keep things streamlined.
Do you have multiple savings accounts or one that's notionally partitioned?
Just one. We don't even notionally partition but stick it all in the offset account attached to our mortgage. But we have just had two job moves and 3 kids in the past 4 years plus a house move and some renovations so the flow has been more out than in so as long as we are breaking even we've figured were doing okay. However if it helps you keep control then do run a spreadsheet or Nationwide allow you to set up multiple saving accounts and name them. I used them when I was getting out of debt years ago.
That looks workable to me, but the key will be putting figures against each of those categories and making sure that the money ends up where it is meant to every month. DH and I try to 'meet' at least once a week to talk through it all, and we use YNAB to keep track of our spending / budget - which forces us to account for every penny, something which sounds like a necessity for your DH.
As a pp says, being aware of big, occasional spends coming up and putting money aside for them is tricky. Having lots of separate accounts sounds great - we are in France and have to pay fees for accounts which makes it a bit pointless to have lots of them. So money that is meant to be set aside for future spending tends to get lost in day to day spending.
Money will also be transferred into Savings accounts for: Holidays, Christmas/birthdays, Short term savings/emergencies, Car costs, House costs, Activities
This sounds like an awful lot to pool together into one savings IMO. We have one joint current account, our own personal current account each with Debit Card, two joint savings accounts and our own personal savings account each (sounds like a hell of a lot written down!)
Our joint current account is where our salaries get paid and where all the bills/DD's come out of. I always leave a bit extra in the Joint current account because some of the bills are variable (Phones/Virgin Media etc) - so the Joint Account is left just with a couple of hundred surplus which then covers when we have a particularly 'bad' bill month and VM bill is higher, or the quarterly TV Licence is due etc.
We then decide how much of the leftover is to go to our two joint savings accounts - money is transferred to them and the remainder is split 50/50 and transferred to our personal accounts to be spent on our personal Debit cards as needed or saved in our personal savings accounts.
Our two joint savings accounts are: 1) For 'shorter long term' savings - our just in case fund, for if the boiler blows up or the car fails it's MOT or part of the roof blows off. It's rarely used. 2) For day to day savings - which is for birthdays, christmas, holidays, splurges - it regularly goes up by a few hundred and down to near £0 as it's in constant use. These are the two that money is transferred to every month, direct from the Joint Account.
We then have our own personal savings accounts which are for secret things and our own day to day budgeting - like keeping the £50 I need for my hair next week separate to my monthly spending money or money for dh's birthday I don't want him to know about and stuff.
Our long term savings is with work sharesave plans so completely seperate - and intended for future house deposits/renovations etc.
This is how I do it:
I get paid into account A, which is the feeder.
From there I have standing orders towards:
Savings accounts (they come out first). I have a short and a long term savings account.
Bills account ( all my DDs)
My mortgage/rent comes out of account A. I overpay the mortgage, so I think of it as a lump sum.
I also take cash out of the account A and use it for food.
Whatever is left can be used for 'whatever'.
have a look at YNAB (You Need A Budget) its an on line budgeting system and I have found it great!
We have one account for all direct debits, one spending account and one savings account. The great thing about using YNAB is you can allocate the money in , say, your savings account to different categories. So for example currently I am putting money in savings account for: emergency fund, household maintenance, car maintenance, Christmas, DS1 university, and holidays. With YNAB I can allocate the money in the savings account to those categories, so when I check on it I can quickly see I have eg £1400 saved towards DS1 uni costs, or £170 put aside for car maintenance etc..You can also set goals for categories which helps you keep on track each month.
You can do a months free trial, it does then have a monthly cost (around £4.50) but it has totally turned our spending and budgeting around!
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