Your day to day money

This section aims to provide you with some straightforward information and useful tips to make managing your money on a day to day basis easier.

Why do I need a bank account?

Money is a part of everyday life, and a bank account provides a secure home for your hard earned cash. An everyday bank account, known as a current account, usually comes with a number of tools and services to help you manage your money easily. For example; helping you pay your bills, or make purchases without the risk of carrying cash. Many banks offer their customers a variety of ways to open and service their account, either through a high street branch, telephone banking, or via the internet.

Paying money in and getting money out of your account

You can arrange to have your salary, pension, or any other regular income paid directly to your current account. Additionally, you can pay in cheques or cash at any branch.

With this type of account, you get a cheque book and a card that enables you to withdraw cash from a cash machine (also known as an ATM). You may also qualify for a payment or debit card, which enables you to pay for products and services.

Paying your bills

You can arrange to make regular payments by standing order, which means you tell your bank to transfer a certain amount of money regularly to another bank account, on a date choosen by you. A standing order is always for a set sum of money, and always happens on the same date, so is ideal for regular payments - For example, to put money aside in a savings account, or to pay rent. You can change or cancel a standing order payment by contacting your bank.

Direct Debit is another way of paying your bills.  You can fill in a form which allows a company to take money straight out of your bank account, which cound be much more convenient for you as you don't need to write a cheque out every time a payment is due. This is useful for regular bills such as your phone bill and, unlike a standing order, the payment takes place automatically even if the amount varies from month to month. You need to advise both your bank and the company who you make the payment to if you want to cancel the payment.

Your payment will also be covered by the Direct Debit Guarantee scheme which operates on three main principles:

1. If the amounts to be paid or the payment dates change, the organisation collecting the payment will notify you normally 10 working days in advance of your account being debited or as otherwise agreed.
2. If an error is made by the organisation or your bank or building society, you are guaranteed a full and immediate refund from your branch of the amount paid.
3. You can cancel a direct debit at any time by contacting your bank or building society. We also recommend you notify the organisation concerned.

Top tip

• Some utility companies offer a discount for customers who pay their bills by direct debit. 

Keeping track of your finances

A current account is usually provided free of charge, as long as you keep money in your account (known as keeping your account in credit). The simple rule to follow is to ensure that your outgoings do not exceed your incomings, otherwise you could incur bank charges.

It's a good idea to keep track of how much money you have in your account. To help you with this, you will be provided with a regular statement, detailing how much money you have paid in and drawn out of your account along with how much is left (which is the balance of your account). Additionally, you may also be able to check your balance at an ATM machine, in a branch, or by telephone or internet banking if your bank provides this facility.

Top tip

• If you pay with a debit card or cheque, it can take a few days for the payment to go out of your account. This means that even if you have the goods which you have paid for, the money may remain in your account for a couple of days. When you check your balance, make sure you also check which items have already been paid, and allow for those that haven't, as the amount shown may not be an accurate depiction of the amount you can still spend.

• The Clearing Cycle: How can you be sure that your cheque has been paid, and what effect can this have? APACS have issued a simple guide (opens as a PDF 0.1Mb) to help take the mystery out of the clearing cycle.

Helping you manage your money

• Use a simple budget planner to help you work out how much money you will have left after you have paid your essential bills. List the amounts you have to pay, for example your mortgage or rent, utility bills, transport etc and add them up. Make sure that you deduct this amount from your salary or regular income before you make any additional purchases.
• It may help with budgeting if you arrange for your bills to be paid as soon as you receive your salary. This ensures your bills are paid, and reduces the risk of overspending on additional goods or services. If you pay by standing order, you can choose when to make the payment (as long as you make sure that the payment is successful in good time to avoid additional charges from the recipient). Some companies who use direct debit may be prepared to change the date to one that will suit you so it's worth asking them.
• If you struggle to keep on top of your finances, it may be worth opening a separate account dedicated to paying your bills. Set up a standing order from your 'everyday' account to your 'bills' account for enough money to cover all your regular bills and arrange to have your bills paid from that account. That way, you can keep your day to day money separate, safe in the knowledge that the bills are covered.