Most people have one current account, one saving account and a slew of credit cards. When it comes time to balance the books and account for what you have spent in the course of a month and what you have left to spend for the next month most people find their accounts a mess and prefer to bury their heads in the sand! Stop! This saving method can help …
The answer to better budgeting and clearer accounts is simple; open up more saving accounts! If you balk at this idea and think that having just a few accounts is bad enough then consider the following list:
Advantages of having just one Current account and one Saving account
- Money comes into and goes out of the same account
- Only have a few cards for your wallet
- Only receive a few statements each month
- Know where you money is (or is supposed to be!) at all times
- Don’t have to juggle money between accounts
Dis-Advantages of having just one Current account and one Saving account
- Money, allocated for different parts of your lifestyle, come into and go out of the same account. If you spend more on the shopping one month, you’ll have no easy way to track
- Your accounts show credits and debits left right and centre. Why did you withdraw money last Saturday and what did you spend it on?
- Keeping money in just two accounts can limit your interest earning capability; loosing you money over time
If you were to open several new saving accounts you’d be surprised how much easier it would to manage your money.
Each month, when your salary is paid into your current account, you can setup standing orders to immediately transfer this large sum of money into several accounts. Each saving account would have a different purpose and thanks to the wealth of saving accounts available, you could benefit from different interest rate.
One saving account can be used for short term savings.
Look for a saving account with immediate access to your cash such as the Cahoot Saving Account
One saving account can be used for long term savings.
Look for a saving account with high interest and a notice period on withdrawals. This will prevent you from dipping into your growing pot of cash whenever you feel like it! Try the Alliance and Leicester Saving Account.
One saving account can be used for regular monthly purchases; such as food shopping, petrol money etc.
By paying slightly more then you think you’ll need into this account not only will you be able to easily track any overspending, but, more importantly, if you get your spending under control, you’ll soon start to see the pennies left over each month turn into pounds. before long you’ll be able to move additional savings from this account into your short term saving accounts. Look at saving accounts with good, immediate access to your money – perhaps via a card. Try the HSBC Saving Account.
With your money now allocated into different pots, the remaining money in your current account is your spends for the month.
this is an easy budgeting method which will give your surprisingly quick results and help you save money.