Setting up a separate bank account for direct debits

[Littlechocola]

Can I (and would it be a good idea to) set up a separate bank account for direct debits and standing orders.
I would put the amount in each month and know what I had left for food and fuel etc.

Would I need to contact each person to tell them? For example landlord, electric company and car insurance?

Sorry if this is a silly question.

If you think it would work for you there is no harm.

For administrative ease it might be easier to set up a new account, have your income paid into the new account and make the transfer to your old account with all the direct debits and standing orders already in place, saves you having to change the details with anyone.

Quite easily. I have a joint account with my husband where our pay goes into and all our bills/DDs come put of them. We then have a Starling account for day to day joint spends. It keeps everything nice and simple and means we know everything is paid covered.

It maybe easier to set up the second account as your spending account as then you don't need to switch anything. I highly recommend Starling as it updates instantly so I can always see what I have spent.

If it's direct debits then yes you would need to let the originators know as they control the payments and would need to set them up on the new account. If it's standing orders then you are in charge of the payments so you don't need to tell them.

Thank you! I hadn’t thought of doing it that way around. Good idea.
What is a starling account? Sorry for being so rubbish.
I always have enough to pay bills and track my spending so I’m not sure what I would get from it.

If you follow either Dave Ramsey or Pete Matthew Meaningful money pod cast they both suggest this in there steps to sort out your financial future.

Set up new account, transfer money that isn't needed to DDs into it on pay day. No need to change details with payees or employers then.

Perhaps leave behind a bit extra too, that can build up a bit and be a buffer for car repairs or Christmas shopping or something.

@AuntMarch you star! Great idea! Thank you.

@lovelyupnorth I’ll have a look for them. Thank you.

I have a starling account and do as others have said. Makes life a lot easier!

Yes we do this. We have a joint account for bills which all direct debits/automatic payments come out of, a joint account for food/petrol/kids stuff/going out as a family and then personal accounts with our spending money in them.

Thank you!

Yes I have a separate 'bills' account. Makes life so much easier, and like PP said I put a bit more than is needed just to let it build up for emergencies.

It's a great idea, and to be honest, I don't know why people do anything else. Unless there is loads of spare money in the account, spending from your bills account sounds like a recipe for disaster.

This is exactly what we do.

Joint bills account
Joint everyday account for food shopping or anything that's not a bill
And then several savings accounts for Christmas, Holidays, Car etc that we cannot access very easily as we do not hold debit cards to these accounts.

DH and I get paid roughly the same. His wage gets paid into the bills account. My wage gets paid into the shopping account. I then transfer money from the shopping account into each of the savings account. Its all done via online banking so I can view all the accounts in one log on.

His wage covers all bills and a bit more. Sometimes he gets paid more depending on what overtime he has done but we tend to leave it in there as a float in case of emergencies.