where to save money & how much?

stevenc1979

Could somebody tell me where the best place is to save money each month.

I currently earn 45k and come out with 2780 per month after tax.

My outgoings each month are:

500 to wife towards mortgage and bills
270 loan payment
9 Internet
21 sky tv
10 dentist
250 standing order to barclays savings account

Then say on average 400 per month for going out etc, (This is only every other month as i work offshore on a 4 weeks on and 4 weeks off rotation).

My savings so far are:

Barclays ISA: 7300
Barclays Savings account: 1500 and something
Barclays Current Account: Around 10k

Any advice would be great

Thanks

Lokolo

- The best way to determine your budget properly is this: http://www.makesenseofcards.com/soacalc.html -it gives all the things you have to take into consideration.

- Any reason why you have £10k in current account?

- What ISA is it? Have you filled it all up for this tax year?

- Hows your pension? i.e. how much are you contributing?

- How much/long do you have left on your mortgage?

stevenc1979

- Any reason why you have £10k in current account?
No reason, just whats left over after money into savings account (can only pay in 250 a month)

- What ISA is it? Have you filled it all up for this tax year?
Its barclays golden ISA, yeah its filled up for this year

- Hows your pension? i.e. how much are you contributing?
don't have a pension

- How much/long do you have left on your mortgage?
Have 78k left on mortgage, inprocess of buying a new house and mortgage will be 100k on that.

Thanks

Lokolo

You have no pension whatsoever? Have you thought about starting one?

Ok I assume by £250 a month its because its a regular saver.

Are you saving up for anything in particular?

LongTermLurker

Obvious starting points would be to a) look at starting a pension and b) improve the interest gained on that growing £10k that won't fit in your regular saver.

a) pensions are good value because of the tax breaks - with your income I guess you pay 40% tax, so for every £60pm you paid into a pension, it would be topped up to £100. What would actually happen is that you would pay £80 and it would be topped up to £100, and then you'd claim back £20 on your tax return at the end of the year. Would your employer also contribute to it? It basically adds up to free cash. On retirement, you can take up to 25% of the total investment as tax-free cash but you have to use the balance to buy an annuity - and the annuity then pays you so much a month in retirement. The downside is you could die the day after taking your annuity and you haven't made the most of the money - so I think it's best to mix a pension with savings and investments.

b) depending on your attitude to risk and the length of time before you need the money, you could invest some of the growing £10k and save some in cash. You can have more than one regular saver, so check out http://forums.moneysavingexpert.com/showthread.html?t=608697

If you only want to save, not invest, I would probably suggest you tie most of the £10k up in some good fixed term deposit accounts, keeping some back for emergencies & holidays. Put all your spare income into the best RS accounts and perhaps drip feed some of your capital into more RS accounts - the combined effect is to increase the average rate of interest you receive. Last year, when the best FTD account was paying about 7%, I was receiving an average of about 9% at one point because I had a 10% and 12% regular saver as well.