How to use your bank account to make budgeting easier
So you’ve got a bank account. But maybe you don’t use it. Or perhaps there are things you could do with your account to make managing your household budget easier.
Not many of us are paid by cash or cheque any more. Most people’s wages or benefits are transferred straight into their bank account.
As soon as the payment has been credited to your account, the money is available for you to use.
To receive a payment, just give your sort code and account number to whoever is paying you. You’ll find these on your bank statement and some debit cards.
Now, what about paying your bills? There’s probably quite a long list of these, so it helps to know which ones are the most important to pay first.
Things like your rent or mortgage, your Council Tax and your gas and electricity bills should be your top priority because if you fall behind with them you could end up losing your home or having essential services cut off.
If you want to pay your bills by Direct Debit or standing order and you’re not sure of the difference or how to go about setting them up you might like to watch our video: ‘How to make payments from your bank account’.
Always time your Direct Debits and standing orders to go out just after you’ve been paid. That way, you know there’ll be enough money in your account to cover the payments.
If you’ve got a smartphone you can download a free app that reminds you before your Direct Debits are due to go out.
Some people set up a separate bank account just for their bills. While others use something called a jam jar or budgeting account that lets them keep their bills money separate from their spending money.
If you stay on top of how much is in your account, you’re more likely to stay in credit – which means peace of mind and no overdraft charges.
With internet or mobile banking you can check your bank statement online any time you need to. Or you can usually get a mini statement from the cash machine.
For more about choosing the right type of account and how to pay bills out of your account, watch our other videos and go to our website.