Automatic savings plan with bank a thing?

[dann2707]

Does anyone know if it's possible to set up like a direct debit with a bank so that every wage you can send some of your money into a savings account so you don't even see it or realise it's gone?

I'm with HSBC if that helps. Saves me having to save the money myself and if it's not there to transfer over it won't cripple my feelings every month haha

Thanks a lot.

[Mark W]

If you get paid on a regular basis you could set up a standing order from your own account to a savings account to take a fixed amount out if you wanted to? So set up an ISA or whatever then set up a standing over to transfer £X from your current account the day after you get paid into that ISA/whatever. That way it'd be automatic and you wouldn't have to actively f**k around with it yourself if that's what you're after?

I do all my banking (of which there is f**k all) online through Santander and have 3 linked accounts (1 current, 2 savings) and just transfer out a set amount of money from my current account from each invoice that gets paid into one of my savings accounts which acts as my 'rent' account. If I got paid on a regular basis then it'd be easy enough to replicate that by setting up a standing order, and although you'd be aware of the money transferring if you looked at a statement you wouldn't really have access to it to immediately lash it out on stuff.

[dann2707]

That's great mate thank you. Standing order is what I've just been told on another forum is what I need!

Seems like the best way to do things

[Muel]

Wouldn't bother personally. Your monthly outgoings will change every month, so makes sense to me that my savings payment should be different...

[Mark W]

That's kind of the point in budgeting though If you're trying to save up money and you've got a minimum amount you want to save each month, then it's just a case of trying to work around that financially. If you end up with a surplus at the end of the month you can then use that to top up whatever you'd already saved.

[dann2707]

Agreed with Mark. I want it so that my actual disposable money is the same everytime so that I know to budget around that.

I know it will take a good few months to understand how much to spend on food, driving, hobbies etc

Need to think about how much to save now! What do other people do if they do?

Like 25% of their wage or something?

[jack1987]

You can get ISA's that you can't touch for 12 months

[Mark W]

That kind of depends on a lot of things realistically - if you're paying rent (and how much that is), whether you've got expenses associated with getting to/from work, whether you're buying all your own food/sharing with others and so on. 25% sounds like kind of a lot, but again it'd depend on your circumstances and your wages.

[anzo]

I have three accounts, called them spending, bills and saving.

The day after I get paid, I move the total a out of all my bills into the bills account with about 20 quid extra to cover any increases.

So whatever is left in my spending accounts is disposable income - I know I don't have to worry about bills.

The day before I get paid, my spending account 'flushes' into my savings account. This facility is available with First Direct so you should be able to do it with HSBC (same group).

Then I get paid, restart cycle...

[shercofray]

.

Edited August 2, 2014 by shercofray

[shercofray]

Wouldn't bother personally. Your monthly outgoings will change every month, so makes sense to me that my savings payment should be different...

Really? Well that's where you need to be strict on yourself and save in a prior month for expected expenditure that may be abnormal.

A lot of people think - oh I'll just save what's left at the end of the month - 9 times out of ten that's £Nil.

If you save, then once that's got to an ok amount £2/3k then look at investing it more wisely.

I have £1k in investments with Fundingcircle and that's getting around 8/9% gross at the moment.

But yeah - standing order works great with HSBC I have 2 to two different accounts each month. One which I can't touch until after 12 months and the other is a general saver.

Give me a shout if you want more personal info Dan x

[Muel]

Really? Well that's where you need to be strict on yourself and save in a prior month for expected expenditure that may be abnormal.

A lot of people think - oh I'll just save what's left at the end of the month - 9 times out of ten that's £Nil.

If you save, then once that's got to an ok amount £2/3k then look at investing it more wisely.

I have £1k in investments with Fundingcircle and that's getting around 8/9% gross at the moment.

But yeah - standing order works great with HSBC I have 2 to two different accounts each month. One which I can't touch until after 12 months and the other is a general saver.

Give me a shout if you want more personal info Dan x

I guess I'm a 1/10 person then haha. I never think about money really apart from large purchases, and I save a decent amount every month.

Edited August 3, 2014 by Muel

[Tony Harrison]

I think a problem for saving is that people see what they get paid as what they have to spend in a month. Typically at the end of the month around the office (when I worked in one) I would hear people saying stuff like "Thank god it's payday!". When I quit to go abroad and find a different path in life, someone said what about money? Surely you'd need like ten grand in the bank? And I asked him why he was surprised that I might have that amount, and he didn't seem to have an answer. People don't see saving as a priority. I'm on the fence with that, because I don't think you should live completely frugally when you're young just to save for an indefinite amount of time. Sure you might want a deposit for a house, but how important is that right now? Life is to be enjoyed all the time, including now, not itself put in the bank for retirement.

The money from my most regular work I have paid into an account, and then I transfer out of there money when I need it, or can still take out via the ATM. I like seeing the money accumulate month after month, and for me that's more satisfying than buying things I don't need. It's true, I earn comfortably more than I need to live on, but even so it's sometimes easier than you think to cut out unnecessary spending. Because I've been without work for periods of time in recent years (by choice, mainly) I now see my bank balance as what I have to live off from now until whenever. I keep in mind that whatever work I have could finish at any time and there is no fallback such as parents or whatever to go and live with. In turn this means that I see a purpose to keeping some money aside, rather than just spending everything I earn every month like I used to when I assumed I would have a regular monthly payment forever. I'm always seeing my bank balance in terms of number of months I could live for without earning money if I had to or if I choose to go off on some adventures for a few months. Once that stretches past 12 months, it's a good feeling. Stops me feeling trapped or dependent on work.

Just food for thought.

Being young and working in the UK is difficult. Prices keep going up, pay doesn't seem to increase and I don't know how people are supposed to make it all add up. I remember having a reasonable - but not flash - apartment, earning almost £30k and not really saving very much each month. This was in my mid 20s, and I was thinking, how the hell will I ever afford to just go out and buy a nice motorbike, or god forbid, buy a house? Because all the managers several rungs up earning about £10k more than me were also happy on pay day...

[Mark W]

The constant wage repression since 2008 hasn't really helped with the "young and working" schtick over here too. The government are having to be really choosy with their figures when they try to pull the "Everything's alright again!" trick to show that we're out of the recession.

Out of interest, and feel free not to answer, what would you say is the rough figure you put on not needing to work for the next 12 months? I'm guessing from your post that the cost of living over there is pretty low?

[Tony Harrison]

My rent and bills work out around £400, and I spend a fair bit on food and drink, plus expenses for work (software subscriptions, meeting room rental, AdWords etc). I cook more for myself now that I have a kitchen, but to live comfortably, go to the rock climbing gym regularly etc, I'd say £1000 a month is good. But if I had to I could move somewhere cheaper and live all-in for half that. On top of that for a year of living it's good to factor in an extra 25% for replacement of laptop, one return trip to the UK, visa expenses renewals and other 'capital expenses'. So £15k would be my rough answer.

However, that's very much a complete, comfortable year. You could get away with half of that, and you wouldn't be living like a hobo. The rent at my old place was £200 and I could live off £10 a day, which is £500 a month. That's with rationing money, keeping track of stuff. Whilst the impression people have is that Asia is cheap, I spent about £40 on food and drink on Saturday night and didn't even get that drunk, and £200 today on a decent desk and chair. It's easy to spend money in most reasonably developed cities. Plus if I want to splash out on a good chunk of mature cheddar and a bottle of single malt, that sh't is expensive here.

[Tony Harrison]

But yes, for me I like to see money in the bank in terms of time I can exist without working, being free of ties and expectations from others. It's a great incentive to stack cash. That was never there when I had 'permanent' employment, there was no necessity to save.

Plus, I started paying more attention to the lifestyles of some of my friends who are self-made entrepreneur types, and they all have comfortable 6 figures in the bank, and one just casually bought a yacht for £200k. I'd be around them and they'd talk as if they thought I had the same, and I realised that for them that kind of money is their own normality. I found that really inspiring, and stopped thinking normal as being a few grand in the bank, and wanted instead to work out how I could have a much bigger sum instead. I'm not someone who desperately wants to be rich, and I don't have expensive tastes or spend much - I have very few possessions of monetary worth - but now that I see money in terms of free time and not in terms of buying things, I want a good buffer. Incase you were wondering though I sure as hell don't have 6 figures in the bank.

[monkeyseemonkeydo]

My problem with month-month money is credit card bills. I always pay them off in full each month (I've got two- one Santander cashback one that I use for shopping and fuel and one Clydesdale one I use for online spending) and that value is obvioiusly different from month to month so I don't know exactly what's 'surplus' until after that goes out near the end of the month.

I don't spend silly amounts and do save frequently but £1200 mortgage is a bit of a killer!

[dann2707]

I don't spend silly amounts and do save frequently but £1200 mortgage is a bit of a killer!

£1200 a month?!?! Do you live in a mansion?

[shercofray]

But yes, for me I like to see money in the bank in terms of time

Plus, I started paying more attention to the lifestyles of some of my friends who are self-made entrepreneur types, and they all have comfortable 6 figures in the bank, and one just casually bought a yacht for £200k. I'd be around them and they'd talk as if they thought I had the same, and I realised that for them that kind of money is their own normality. I found that really inspiring, and stopped thinking normal as being a few grand in the bank, and wanted instead to work out how I could have a much bigger sum instead.

I see money in terms of free time.

You have it down to the T.

Everyone needs money, although some people have the yatchs, cars and planes what they ultimately have is the ability to spend their time doing what they want to do.

I know quite a few people with +1m in the bank, and making the same each year, who 'work' for 2-3 hours a week - that is what is great.

That's the goal - having the money to CHOOSE what you want to do with your time.

[monkeyseemonkeydo]

£1200 a month?!?! Do you live in a mansion?

Just a 3 bedroom semi with a garage etc. Certainly nothing special but I think we did kind of miss the first step of the property ladder and went straight for rung 2...

[N.Wood]

I just spend what I need to when I need to, when I've built up what i'd consider 'enough' I dump it into my ISA and start again.

Some months I spend a lot, some I spend not so much and I'm not the kinda guy to give myself a definitive limit to my spending so it varies and as such a structured investment strategy doesn't really work for me.

[Vivian-Trial]

Going on your banks website or making an appointment would of answered this.

Online banking is quite good as you manage between accounts I.e. Transferring money from account to another whenever you want.

[Ross McArthur]

A few guys in my work run a Credit Union. My set amount of cash comes off my wages before I even get the chance to see it in my own RBS account. I guess that’s ideally what you're after?

Ive been a member of the CU for a number of years and over that time Ive had a few wage rises. Every time I get that rise I change the amount which goes into the CU, saving the difference.

The cash in my CU account is a lot more difficult to get to if I want it. I have to request it, get signatures, pick up the cheque and cash it in a bank in town...as opposed to just being able to do some digital banking and whip it out of an ATM or spank it on some tings online.

[shercofray]

Words.

What return do you get if you don't mind me asking?

[Ross McArthur]

What return do you get if you don't mind me asking?

I was actaully going to put that down but couldnt remember. I think there is a dividend at the end of each tax year which gets divied up between members.