Student trying to save money...

KierNet

Hey, just wondering if someone is able to help me with some tips on the best way to save money for a new car.

I've recently just got some more hours at work, before I was only getting £200 a month, which was just enough for all my outgoings, but if something went wrong with my car, I was stuck.

With my new hours, I'll be getting around £700 a month (before tax, does anyone know how much tax I'll be paying each month? Get rather confused with it all), I'm planning to put £500 a month away to save up for a new car.

If I have the money in my account I will spend it, so I was thinking of getting another bank account either Barclays or Halifax for example, each month put £500 in and give the card to my mum or something so I cant get to it until I have the amount I need for a car.

I also need to find the right bank account, I need to be able to access the money whenever (incase my current car breaks down again), and dont want to have to put a minimum amount in each month. Does anyone know of anything that suits this? I also dont want to be able to access the account online, only pay money in online from my Lloyds account, is this possible?

Thanks for any help

whitfreak

Why not just open a savings account? The extra step of having to transfer it back to you current account should stop you from just spending it, and you should be able to find one which gives "instant access". Although if you want true instant access you'll need one with a card/cheque book or for it too be with the same bank as your current account so payments can clear instantly.

While savings rates are low they should be higher than a current account. Think about getting a cash ISA.

McKneff

why not put it into an easy access ISA with no tax its a little extra at the end of the year towards your car.

Lokolo

Also for tax if your gross is £700 and tax code is 645 then it is £643 you take home:

http://listentotaxman.com/index.php?c=1&yr=2009&age=0&add=0&code=645&pension=0&time=12&ingr=700&vw[]=yr&vw[]=mth&vw[]=wk

See ^^

KierNet

anniehanlon wrote: »

why not put it into an easy access ISA with no tax its a little extra at the end of the year towards your car.

Where you say 'a little extra at the end of the year', I'm planning to get my car late September early October, will this effect it at all? I've always thought with ISA's, you need to put X amount in each month, and cant get to the money until the end of the year.

Lokolo

KierNet wrote: »

Where you say 'a little extra at the end of the year', I'm planning to get my car late September early October, will this effect it at all? I've always thought with ISA's, you need to put X amount in each month, and cant get to the money until the end of the year.

Not true at all..... However, with most savings accounts, interest is paid annually, but if you close the account you get interest then.

Is there any reasn as to why you're buying a car in Sep/Oct instead of waiting until your car blows?

rb10

This may be a silly question, but do you really need your car???

McKneff

You could take your money out whenever you want but suggest you maybe leave a small amount in and not close the account. The interest will be added at the end of the tax year and presumably you will have some spare cash to save. You can save up for your next years tax and insurance in there.

whitfreak

I havent shopped around for a savings account (ISA or otherwise), but you should not have too much trouble finding one which pays interest monthly (or has that option). There are normally better rates for regular savings accounts but they arnt normally instant access so not really suitable for what you want. The other thing you have to watch is the minimum balence required. Some are small, like £1 or £100 but some require openning balances of £1000 which will take you a couple of months to build up so probably not worth the hassle.

Ironically your requirements are quite simple. Either an instant access savings account, or an instant access ISA. Not knowing how much your going to save just bare in mind that you can only deposit £3600 in a cash ISA for this tax year. Martin's guides on saving explain alot more.