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  • FIRST POST
    • LondonRose
    • By LondonRose 6th Sep 17, 12:04 PM
    • 14Posts
    • 0Thanks
    LondonRose
    Young family with roughly 30k what to do with the money
    • #1
    • 6th Sep 17, 12:04 PM
    Young family with roughly 30k what to do with the money 6th Sep 17 at 12:04 PM
    Hi all

    I am looking for advice we are in the process of moving to a house, we have taken some extra money on the mortgage as had planned to do some building work ie. extension but have decided with a young family its best to enjoy the early years with the kids and not worry about money we will have about 28k. We are unsure what to do with the money and where to invest it if anyone could offer some advice to get us started.

    Many thanks for reading........ Look forward to reading through the replies.........
Page 1
    • bostonerimus
    • By bostonerimus 6th Sep 17, 12:27 PM
    • 847 Posts
    • 425 Thanks
    bostonerimus
    • #2
    • 6th Sep 17, 12:27 PM
    • #2
    • 6th Sep 17, 12:27 PM
    Not wanting to worry about money implies that you should just spend it....maybe on a home extension. If you do want to think about how to best use the money then you might consider.

    1) pay off all high interest debt,
    2) Put money for 6 months worth of expenses in the bank,
    3) Fund your pensions
    4) Fund ISAs....you might think about a junior ISAs for the children as well as your own.
    Misanthrope in search of similar for mutual loathing
    • eskbanker
    • By eskbanker 6th Sep 17, 12:48 PM
    • 5,466 Posts
    • 5,269 Thanks
    eskbanker
    • #3
    • 6th Sep 17, 12:48 PM
    • #3
    • 6th Sep 17, 12:48 PM
    we have taken some extra money on the mortgage as had planned to do some building work ie. extension but have decided with a young family its best to enjoy the early years with the kids and not worry about money
    Originally posted by LondonRose
    Just to be clear, I take it you didn't secure the extra mortgage money from your lender on the basis of increasing the property value by extending but subsequently decided not to proceed?

    It sounds more like you're looking to spend the money than save it but if you're wanting to put it away somewhere for the time being then a good place to start is the 'how to start saving?' article linked further up the page.
    • xylophone
    • By xylophone 6th Sep 17, 12:52 PM
    • 22,857 Posts
    • 13,211 Thanks
    xylophone
    • #4
    • 6th Sep 17, 12:52 PM
    • #4
    • 6th Sep 17, 12:52 PM
    You could regard it as your emergency fund and hold it in interest paying current accounts.

    You might each open a Nationwide Flexdirect account and a joint Flexdirect.

    You might each open a Flexclusive regular saver.

    You might each open a couple of BOS Vantage accounts.

    DDs required? Open a couple of Tesco savings accounts each on which DDs to pull from other accounts can be created.

    And your "everyday account"?

    http://www.santander.co.uk/uk/current-accounts/123-current-account?cid=ppc-123currentaccounts-google-dr-search-currentaccounts-Apr17&gclid=EAIaIQobChMIgbnok7-Q1gIVbrXtCh1mSQvGEAAYASAAEgIdnfD_BwE
    • killergibbo
    • By killergibbo 6th Sep 17, 3:47 PM
    • 26 Posts
    • 10 Thanks
    killergibbo
    • #5
    • 6th Sep 17, 3:47 PM
    • #5
    • 6th Sep 17, 3:47 PM
    invest the money into your new house. building a extension will add value to your home but speak to the right people first as they will know what sort of price you would get on that day with that kind of extension
    • kidmugsy
    • By kidmugsy 6th Sep 17, 6:38 PM
    • 9,597 Posts
    • 6,356 Thanks
    kidmugsy
    • #6
    • 6th Sep 17, 6:38 PM
    • #6
    • 6th Sep 17, 6:38 PM
    I am deeply suspicious of the purported wisdom of spending money on a house in the belief that in some years time a perfect stranger will think "just what I want!" and therefore pay an inflated price for the house.

    By the time your children need extra room your job may have taken you to some different house anyway. Meantime you could follow xylophone's suggestions.
    • FatherAbraham
    • By FatherAbraham 6th Sep 17, 9:34 PM
    • 737 Posts
    • 561 Thanks
    FatherAbraham
    • #7
    • 6th Sep 17, 9:34 PM
    • #7
    • 6th Sep 17, 9:34 PM
    invest the money into your new house. building a extension will add value to your home but speak to the right people first as they will know what sort of price you would get on that day with that kind of extension
    Originally posted by killergibbo
    Extensions rarely add value larger than what they cost to construct.

    Warmest regards,
    FA
    • Apathy
    • By Apathy 7th Sep 17, 6:22 AM
    • 96 Posts
    • 29 Thanks
    Apathy
    • #8
    • 7th Sep 17, 6:22 AM
    • #8
    • 7th Sep 17, 6:22 AM
    So sarah beeny double your house price for half the money is a bit of a scam/mis-sell? Always been a bit sceptical..
    • FatherAbraham
    • By FatherAbraham 7th Sep 17, 6:54 AM
    • 737 Posts
    • 561 Thanks
    FatherAbraham
    • #9
    • 7th Sep 17, 6:54 AM
    • #9
    • 7th Sep 17, 6:54 AM
    So sarah beeny double your house price for half the money is a bit of a scam/mis-sell? Always been a bit sceptical..
    Originally posted by Apathy
    Television producers are rewarded for sensational superficialities, and under no real obligation to provide audited accounts for the projects presented.

    One wouldn't take lifestyle advice from "The Only Way is Essex", and one shouldn't take investment advice from property-porn shows.

    Warmest regards,
    FA
    • tim_n
    • By tim_n 7th Sep 17, 10:02 AM
    • 1,565 Posts
    • 1,315 Thanks
    tim_n
    First off: "we have taken some extra money on the mortgage"

    You mean you've increased your debt with a low cost loan. Don't spend it, it's money you don't have.

    You don't need to spend money on kids to have a good time. They always appreciate having time with their parents rather than just being spoilt.

    If you don't need the extension or repairs to the house to make it habitable, don't spend it. If you had horrendous damp/mould, leaking roof etc, take care of that first.

    If you're willing to take a risk, you could put the £30k into S&S ISA for yourselves into a passive investment fund for 10 years and probably make more money than you're actually spending out. But if the market tumbles you could lose 5-50% of that easily and if the timing is really bad and you need that money back, you'll be taking the hit very personally.

    I'd be tempted in holding at least £20k of it in low risk accounts (like a cash ISA) for emergencies if you don't have an emergency fund. Then start building up an investment fund to make some money you can afford to take a risk on.
    Tim
    • IanSt
    • By IanSt 7th Sep 17, 12:29 PM
    • 44 Posts
    • 16 Thanks
    IanSt
    You've not given any details on salary, loans, investments etc, but if it were me and I'd borrowed additional mortgage money for a purpose that I was no longer going to do then I'd look to pay it back to reduce any loans, starting with those at the highest apr.

    If you really wanted to spend the money on your kids then do it by investing the 30k on their behalf so they'll have something when they get to a suitable age. From the sound of things this is at least 10+ years away, so investing it into funds is likely to bring them the most money. There's lots of threads on this board about investing lump sums so have read through them.
    Last edited by IanSt; 07-09-2017 at 3:27 PM.
    • LondonRose
    • By LondonRose 9th Sep 17, 9:33 AM
    • 14 Posts
    • 0 Thanks
    LondonRose
    Thanks for the responses............ initially we took the extra money as my partner wanted to convert the kitchen and dining room and add a play/family room and a downstairs bathroom. I am reluctant as we have visited the property a number of times and we have both agreed that the property is in fact large enough and the doorways are larger than usual so it feels very open. Our only debt is our mortgage 200k we ended up borrowing 10k more than we needed on the mortgage and have saved another 18k which sits in a current account, we also have 7k in sky shares..

    We have overpaid our mortgage over the last 5 years so its been along time since we had savings in our accounts as we continuously put this towards reducing our mortgage and now have 250k in equity.

    My partner earns 32k and I earn 17k and we have one child and another due in December. The property we are purchasing is now our forever home and may extend in time but as we are not due to remortgage in the next 5 years and will be penalised for overpaying on our new mortgage we just were looking where to invest low risk. I say split the money into Isa and my partner believe current or savings is best.
    • xylophone
    • By xylophone 9th Sep 17, 10:04 AM
    • 22,857 Posts
    • 13,211 Thanks
    xylophone
    ISA rates are poor at the moment.

    http://www.thisismoney.co.uk/money/saving/article-1583864/Best-savings-rates-Isas-Cash-Isa-accounts-fixed-rate-Isas.html

    You would get a better return using current accounts - see previous post.
    • eskbanker
    • By eskbanker 9th Sep 17, 10:39 AM
    • 5,466 Posts
    • 5,269 Thanks
    eskbanker
    We are unsure what to do with the money and where to invest it if anyone could offer some advice to get us started.
    Originally posted by LondonRose
    we just were looking where to invest low risk. I say split the money into Isa and my partner believe current or savings is best.
    Originally posted by LondonRose
    At the risk of being pedantic, are you using 'invest' and 'save' interchangeably? Investing is generally considered to mean putting money into stocks/shares, funds, etc, with risk of capital loss (and also potential for significant long-term growth of course!) whereas saving refers more to retaining money in cash deposit form, usually capital-protected.

    I imagine you'd be looking to stay in cash but wonder if your preference for ISAs (and the fact that you already hold some shares) means that you're considering S&S ISAs for long-term investment?
    • Alexland
    • By Alexland 9th Sep 17, 11:04 AM
    • 186 Posts
    • 99 Thanks
    Alexland
    Maybe the sky shares were bought through some kind of employee share scheme but it sounds risky retaining so much money in the valuation of a single company.

    My parents had 18k in AIG from employee benefits and retained them (against my advice 20 years ago) after leaving and saw them devalue to under 2k so my advice is to sell the shares as soon as you are allowed to diversify. In your situation I would keep the 7k invested in a low cost multi asset tracker fund eg the Vanguard Life Strategy range

    As it sounds like you have not moved in yet I suggest keeping the rest of the money in cash (regular savers etc most still allow easy access) and only doing urgent work on the property until you have had time to live in the home and come to a balanced view on what needs doing and when. You might regret it if you kick off projects too early before reflecting on their value.

    The early years with children are the best time to invest for their future and to take the pressure off in your later years.

    At the very least consuder putting 100 pounds each in an Orbis Access S&S Junior ISA and they will double it and run the investment without fees until they are 18.
    • LondonRose
    • By LondonRose 10th Sep 17, 9:19 AM
    • 14 Posts
    • 0 Thanks
    LondonRose
    Thanks all for the advice has been very useful as I did not have a clue where to start............

    The sky shares were from an employee scheme and my partner wants to wait for a buyout which he believes will happen within the next few years and then by that point we will need to replace our car so will use them funds.

    I have read through the Martin Lewis savings guide and it has made it clearer to me that Isa is not best place at the moment so will need to get opening some new accounts once the house sale has gone through which should be in the next 2 weeks.

    I am interested in investing a small amount................ where would I start as have never invested in my life.

    I am reluctant to save for kids at the moment, which may not be a wise decision. I thought once I am not paying so much childcare I intend to push money into my mortgage and hammer that down and then I will be able to save larger amounts for the children when they are older and I am not stuck with my monthly mortgage to pay.
    • barginfinder
    • By barginfinder 10th Sep 17, 9:52 AM
    • 324 Posts
    • 82 Thanks
    barginfinder
    I started saving for my daughter when she was quite young, £100 per month at 6%, its surprising how much she is worth now at 16! - the thing with regular saving (or investments) is the earlier you start the more the benefits and you get used to lower disposable income - even £25 per month would be a good start for the children - just a suggestion.
    I need a better signature
    • bigadaj
    • By bigadaj 10th Sep 17, 10:50 AM
    • 9,907 Posts
    • 6,326 Thanks
    bigadaj
    Thanks all for the advice has been very useful as I did not have a clue where to start............

    The sky shares were from an employee scheme and my partner wants to wait for a buyout which he believes will happen within the next few years and then by that point we will need to replace our car so will use them funds.

    I have read through the Martin Lewis savings guide and it has made it clearer to me that Isa is not best place at the moment so will need to get opening some new accounts once the house sale has gone through which should be in the next 2 weeks.

    I am interested in investing a small amount................ where would I start as have never invested in my life.

    I am reluctant to save for kids at the moment, which may not be a wise decision. I thought once I am not paying so much childcare I intend to push money into my mortgage and hammer that down and then I will be able to save larger amounts for the children when they are older and I am not stuck with my monthly mortgage to pay.
    Originally posted by LondonRose
    Sky have been subject to a rather protracted bid from fox, so the murdochs effectively buying out the remaining share holders.

    I'd say there's far more risk of losses on single company shares than huge gains but it's your choice.
    • Alexland
    • By Alexland 10th Sep 17, 12:29 PM
    • 186 Posts
    • 99 Thanks
    Alexland
    Once you get to enough equity to have access to the best mortgage rates there isn't much point overpaying when on average across enough years a regular fund investment should generate more growth than your mortgage interest rate. Kids are expensive so the earlier you start the more the returns will compound.

    Mortgages get easier with time anyway as the repayment becomes a lower proportion of your payslip due to inflation.
    Last edited by Alexland; 10-09-2017 at 12:35 PM.
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