Can Direct Debit and Standing Order Simplify Finance Management?

Part of being a responsible married couple and providing for our kids is the ability to pay our household bills on time to avoid incurring penalties for late or missed payments.

But in a household with two income earners, who handles the utility bills? Who's in charge of rent payments and other regular bills? Who's in charge of making payments when the credit card company is collecting payments?

After eight years of being married to each other, we figured that managing money doesn't need to be complicated.

At the start of each year, we discuss what's required to allocate to our bills and other recurring payments.

We use today’s technology to create standing orders or set up a direct debit scheme.

Hargreaves Lansdown’s Head of Personal Finance Sarah Coles reiterated how direct debit payments can help married couples navigate finances.

“Direct debits can be a great way to ensure that even if your partner is terrible at saving, the money goes out of their account each month without them having to think about it. It’s also a useful way to ensure that all the bills are covered," said Coles.

Our income from our main joint bank account is split into three additional joint bank accounts: expenses, savings, and investments.

Expenses

We know exactly how much our monthly bills or regular payments are.

That means we can easily allocate money to an expense account so that every standing order and direct debit authorisation can be charged successfully.

With our direct debit instruction in place, we don't have to miss a payment date.

We can always keep the lights on at home because we don't have to worry about energy bills when they come. This creates a sense of security, which is vital in any union.

Savings

As advocates for the importance of taking breaks and spending quality time with our family, we love going on holidays regularly.

So, we allocate a percentage of our income to savings. This savings account is dedicated to our holidays.

This is also where we pool our emergency fund, which is intended for rainy days. We don't have to worry too much when unexpected costs arise.

Investments

A portion of our income also goes into investment.

Part of this pot remains in cash. It's important for us to maintain a cash flow that will allow us to seize opportunities quickly when they present themselves.

The rest are what we call boring investments. For tax purposes, each family member, including Jere, has a Stocks and Shares Investment Savings account (ISA).

It's crucial for us to save money for our children.

Jere has had a Stocks and Shares ISA since he was born. We contribute to it monthly and add the cash he receives from family and friends for his birthday and Christmas.

With the help of compound interest rates, our goal is to contribute significantly to our children’s first cars, weddings, and houses.

The Bottomline

Our method of managing finances as a married couple emphasises the importance of simplicity.

By maximising technology and organising our incomes into designated accounts for expenses, savings, and investments, we ensure financial stability and growth.

A direct debit system and standing order creation are key to streamlining bill payments and maintaining financial security.

Through careful planning and strategic fund allocation, we aim to build a prosperous future for our family and fulfil our long-term goals.

Do you utilise the direct debit process to ensure your bills are paid on time? How does technology help you and your partner manage your finances? Please leave a comment below to share your thoughts and experiences!

Read more about other ways we manage our finances as a married couple here.

If you're curious about how we structure our annual budget, sign up here for a FREE copy of our budgeting template.

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