How much can you save?

Leahcim1985 wrote: »

Set up a direct debit to take savings out of your account and into a savings account on payday.

The principle of saving regularly and automatically is great - particularly in combination with a Regular Save like the First Direct 8% one.

But it's not such a good idea to set up a direct debit , or standing order, on the payday. What if your money arrives late? This happens. People come crying onto the Budgeting & Bank accounts board all the time because they have been caught out by a late arrival.

Better leave 3 or 4 calendar days between the expected payment and the money going out automatically.

You will get to 10K in 15 months, a little faster if you consider compound interest. Which isn't much these days but I hope you are exploiting Regular Savers and ISAs. Being able to save £500 a month is the stuff of dreams for the vast majority of UK people, so just hang on in there and remind yourself how incredibly lucky you are!

No pain, no gain, I'm afraid - - - though don't overdo it, you still need to live and have some fun as well.

I don't know how much interest your ISA pays - if it's not close to 4%, you could most likely do a lot better bunging your monthly money into one or more Regular Savers, and then use the funds to put into your ISA. You could perhaps even use your £2,500 to make it work a bit harder ("dripfeeding technique")

Use Martin's calculator to work out the difference http://www.moneysavingexpert.com/savings/best-regular-savings-accounts#dripfeed

It's not going to be hundreds extra, but it could pay for an extra night out, a nice meal, a nice present..... and it's a good exercise on how to make our money return the max for you.

The Regular Savers I would consider if I were you:

First Direct Regular Saver - 8%, max £300/mth, 12 mths fixed
Nationwide Regular Saver - 6%, max £250/mth, instant access
HSBC Regular Saver - 6%, max £250/mth, 12 mths fixed

Also, are you "collecting" the monthly fiver from Halifax? That's £60 a year.

All these accounts have minimum monthly deposit requirements - but you can easily meet those since you already have £2.5K. You just cycle the same money through all the accounts every month on standing orders. You don't have to pay in all the money in one go - - e.g. if the requirement is £1K/mth, it can be met with 4 x £250......

You could collate another £100 on the way, depends who you are banking with. Both First Direct and Halifax are paying £100 if you switch your current account to them.

And finally, if you aren't with Santander, consider their 1-2-3 current account. It costs £2/mth but you get cashback and interest. How much you get depends on your circumstances.

A whole lot of food for thought here, and I'd say probably at least another £100 - £200 a year for you. May be even an entire month off the race to your target £10K!