Bank account savings 'pots'.

[ImFree2doasiwant]

I'm trying to sort out my finances, which are in a bit of a dire state. I think I'd really benefit from an account or facility where I can direct money each month for things like birthdays, holidays, car maintainance etc. At the moment I'm very much "spend as you go".

I need to reduce my overdraft as a priority, but once that's done, would like to plan a little bit ahead by saving for different things.

Any recommendations? I currently have a lloyds and a natwest account.

Any other tips for saving?

I always see Monzo recommended, but what's the difference between one of those accounts and just setting up say 5 online savings accounts with your bank as you can rename them 'birthdays / Christmas' etc and make your own 'pots' as it were. Am I missing something?

I use monzo to save each month for yearly expenses.

For example, if the car insurance is £600, you set up a pot and put £50 aside per month on pay day before you do anything else. By the time your car insurance rolls around, you can pay it stress free! It's great!

I do this with, Xmas, tv license, home insurance, car insurance, MOT, car tax and holiday.

The idea is you split the cost throughout the year, so you can more accurately see exactly what you have "spare" each month to save or pay down debt.

Some people find cash envelopes helpful too. This is where you save physical cash into envelopes for various spending categories. Whilst I don't think it's a super amazing idea to have wads of cash in your house, it can be helpful for certain categories where you tend to over spend.

For example, I use cash only at the supermarket. I put £200 per month in the envelope, and I don't go past that unless I really need cake.

There are tonnes of good budgeting you tubers so look to them for inspiration!

@weewoman123 I definitely need to sort my spending out. Thats my first Port of call. I'm a bit of a fritterer. I've planned summer holidays pretty well, lots of very cheap or free stuff abd taking packed lunches and coffee flask every where. That will help.

Interested to hear why Starling/monza are better than having lot of savings accounts with my bank (which a pp has kindly told me I can do!)

I think it’s probably mostly about the ease of which you can contain all your savings in one place & set up/move/change money around very easily. They’re not separate accounts, but pots within one account - so you’re not having to set up multiple different savings accounts with different acc numbers etc, you just have one which holds your savings in different places.

Also if you’re saving the money specifically to then spend on something else (e.g. car insurance), it’s much easier to shift money into the central account and pay normally on card than to shift money between accounts and make sure you’ve got the right card etc.

It’s not necessarily that different to having multiple savings accounts with different names, but I just think it’s probably easier!

@ImFree2doasiwant it's worth checking whether your bank has a 'round up' saving feature, I set this up on my Halifax account and it basically means anytime I spend the remainder of the money to round it up to the nearest £1 (I think it is) gets saved into a seperate saving account.

Frustratingly Santander my other bank doesn't seem to have set this up yet as a feature.

I just have loads of savings accounts at my bank. I'm with natwest but I'm sure you could do it with any. I have one for car experience, one for birthdays, on for holidays and one for decorating/ furniture. I've set up a standing order to transfer money over to each, and treat it like a bill when I'm budgeting.

I second the PP who said about the banks you can’t open. I always have at least 3 on the go at any one time. I save £1 and £2 coins only and I usually get between £500-600 after a year. I use mine for my car insurance, holiday, Christmas etc. I just label the tins. I don’t spend any change though, at the end of the day, every day, whatever is in my purse, goes in the banks. You don’t miss it and it builds up nicely.

I find I’m too quick to transfer money from my savings account to current account so the banks are great, plus it’s a wee thrill when you open and see what you’ve managed to save.

If you have an overdraft, concentrate on paying that off before you start syphoning money off into pots or else you'll end up paying a lot more in interest and the rate is very high.

Have a look at moneysaving expert and do everything that is relevant.

www.moneysavingexpert.com/family/money-help/

On the matter of spending, definitely think about what you're spending money on and how to stop or at least massively cut back. Go through your last few months bank statements to see how much it all adds up.

Do you have anything you can return or sell if you have a shopping habit or has it all been tat or prepared food and drink?

You mentioned you have a Natwest account currently. They have a regular savings account paying 3% interest on savings of up to £50 per month. Could be a good thing to start with?

You can only spend every pound once!

Another vote for Monzo. It’s transformed how I deal with money.

I use YNAB which is not an account but software. You can link bank accounts to it but I don't, I just do it manually. It's a monthly fee one but honestly pays for itself, I love it, it's so worth it. You can do unlimited savings pots plus tweak them, attach goals, calculate how long things will take to save up for etc and it works with any accounts you already have.

You need to stop looking for technical solutions imo and go back to basics:

• write a budget
• decide how much you will spend each week
• stick to it

Sorry mine is a boring answer but how you configure your accounts makes little difference, keeping accurate track of your spending activity is the priority.

Also money saving expert forums help change mindsets.

I am with Barclays and have multiple accounts listed under 2 cards. Wages go into one account and then are manually directed via online banking to:

Joint bills (mortgage, council tax etc)
Personal bills (car insurance, phone etc)
Petrol/Gym/Food shop money
Savings

And then whatever is left is kept in the wages account.

Now its all separate I fritter away so much less and have managed to save £1,000 just by being able to see all my money!

Husband thought I was crazy having so many accounts, but recently he realised he'd spent most of his wages on absolute crap without realising because he wasn't assigning himself a budget.

What do you fritter money on? I realised I spent loads on clothes and cosmetics. For a long time I bought something every day, it's a hard habit to break.

I’m with RBS and just have a couple of accounts that are named what I am using them for.
Easy to swap money between them.

www.google.com/amp/s/amp.theguardian.com/money/2021/jul/30/monzo-under-investigation-by-fca-over-anti-money-laundering-rules

@BarbaraofSeville my plan is definitely to address the overdraft first, although there will be children's birthdays abd things like that while I'm doing that. And things that need to be paid fir that aren't monthly. I'm nit sure whether to just deal with the overdraft and accept that it will fluctuate as these things come up. Thank you for the link, I will take a look

@Todaywillbegoodthat might be a good start actually. Thank you

@lannistunut you are right and that's something I am doing. I've had a tendency to just spend what I want, not hugely to excess, but things like groceries, I don't budget, I just buy. I buy bottles of drink, cofffees, snacks etc when out. I could cut back a lot I'm sure.

@Cheesypea as above, bottle of fuzzy drinks at the petrol station, snacks and lunch at work. If I/kids want something, order from amazon. Not huge purchases,but it all adds up.

As an example, I took the dc to a soft play recently. It's only £1 each. I would normally have bought usxall lunch, them an ice cream and drink, me a couple of coffees. I took packed lunch, their water bottles from home abd I bought 1 coffee.

I'm with @Peeceandquite I use Chip. 1.25% interest and you can set up pots within it. You link it to your bank account and it monitors your spending patterns and every few days it makes a "Save". You can set your level of save to low, medium, high level. I started on low but I'm now on medium and I've saved £3500 since 1 Jan and not missed it. You can also do manual saves so you can transfer money yourself in addition.

I also have Moneybox. This also links to your bank account and rounds up every transaction to the nearest £1 and once a week moves the total across plus I save £100 per month on pay day. Mines in a stocks & shares ISA which is currently earning around 13% interest

Another vote for Monzo

Yes we're Monzo people as well. I have pots for birthdays, Christmas, car, home improvements, holidays and petrol. I pay a monthly portion of our usual annual spend into the pots each month then can only spend what is left in my actual account. My bills still come out from a traditional bank however.

The reason Monzo and Starling are often recommended too is because they break your spending down into categories so you can see yourself how much you've spent on coffees etc, you can see example here of their annual summaries but this is available all the time to show monthly spending too community.monzo.com/t/your-year-in-monzo-2020-is-ready-for-you/111689/22
You also get a running total of your daily spend after each transaction.

I like how easy it is to use the pots. You can lock them, round up into them and move money around easier. You can pay contacts who have Monzo really easily, and even those who don't through web links.

I swear I don't work for them it just really helped when we were saving for a house and children! I know a lot of banks (I'm looking at you Halifax) are now taking some of these features on themselves anyway.

Can I ask if you keep your regular bank account and use Monzo and Starling as well as that or do you just have an account with them?

@Gingerkittykat

Can I ask if you keep your regular bank account and use Monzo and Starling as well as that or do you just have an account with them?

I do as I wanted to keep my direct debits and cards already set up. But you can go "full Monzo/Starling" and they sort the swap for you. Monzo pay your salary in the day before as well which is a nice feature for the first month, then doesn't really make a difference after!

I have all my accounts with starling and it's brilliant (and run by a woman). It's just what modern banking should be. Yes as someone says the key is in figuring out where your money goes, but starling makes it so easy to move money so you can't actually see it and you kind of forget it's there - but it is instantly accessible if you need it. It also rounds up your spending and you can assign all the spare pence to go into one of your savings pots. You could have a billion savings accounts but then that relies on remembering to set up and remember the details of all the savings accounts and how much money each one has. On starling i can just look at the pot screen and see it all in one glance. Honestly it's revolutionised how i managed my money and as someone else said now I've got a pot for emergencies, i was living in my credit cards but now I've got a months worth of income set by. Id tried all sorts before to stop me overspending but this actually works because the extra money is out of sight out of mind but i can see it at all times (conversely). If you need to deposit cash you can do it at the post office and you can deposit cheques by taking a photo of it.