Savings...advice

in-trouble_3

looking for some advice for my brother on savings account, savings will start from february 2007 until july 2012, he has worked out......

2007 he will save £1500
2008 he will save £3490
2009 he will save £3510
2010 he will save £2774.04
2011 he will save £5840

total £17114.04

which he will pay off his debt of £15480.52
leave £1633.52

then 2012 Dec to July he will save £8920

total savings £10553.52

what is the best account to put this money in?

many thanks and sorry if it all sounds stupid.

brranger

maybe look at regular savers there are some great rates @ llyods etc, or and Isa though a regular saver over 7.5% should beat it as your not saving a lump sum from the start.

Robert_Sterling

in-trouble wrote:

looking for some advice for my brother on savings account, savings will start from february 2007 until july 2012, he has worked out......

2010 he will save £2774.04

How does he calculate what his savings will be several years in advance and to the nearest penny?

Cypher

I'm really intrigued about his projected savings.

Why only £1500 in 07, the .04p in 2010 and then at the end in 7 months being able to save £8920

in-trouble_3

Cypher wrote:

I'm really intrigued about his projected savings.

Why only £1500 in 07, the .04p in 2010 and then at the end in 7 months being able to save £8920

he has worked out his fianances, obviously to pay off the debt that he owes, he has set up a budget each month and what he can put away each month, hope that makes sense, not sure if he is doing the right thing by doing that?

in-trouble_3

Robert_Sterling wrote:

How does he calculate what his savings will be several years in advance and to the nearest penny?

has i said before he has done a budget, to find out when he can pay off his debts.

in-trouble_3

brranger wrote:

maybe look at regular savers there are some great rates @ llyods etc, or and Isa though a regular saver over 7.5% should beat it as your not saving a lump sum from the start.

thanks for that. he doesnt want to go to lloyds, he owes debt to them so any savings lloyds will take, he was looking into hsbc bank

so just a normal regular savings account will do then? do you get charged for having a certain amount of money in a bank account say over £5000

nearlyrich

It's not a good idea to save when he could be paying it off his debts, any interest he earns will be massively outweighed by the interest on the debt unless it's all at 0%.

Give him some great advice, have a look at the DFW board and work out the best way to get rid of all his debts then start saving!

in-trouble_3

so any spare money each month say £500 can go towards his debt, or maybe save for 3 months and then pay off some of his debts?

nearlyrich

in-trouble wrote:

so any spare money each month say £500 can go towards his debt, or maybe save for 3 months and then pay off some of his debts?

Have a look at the top of the DFW board there is a link to another site called What's the cost where you can work out how to allocate excess money to make maximum impact on debts. You can also look at the interest you would get from savings and work out how much it is costing you;)

I have put the link in for you....

freda

The risk with saving while you have debts is that you will not have the willpower not to dip into the savings when you 'need' something - either a treat or when you come up with a bill you haven't (but should have) budgetted for.

More importantly, he will be worse off saving as the interest rates on his debts will be overwhelmingly higher than anything he could get from savings, unless he can constantly move his debt around to take advantage of 0% deals. So he would be MUCH better paying off whatever he can every single month onto the debt with the highest APR, whilst paying the mins on all the others. When that debt has gone, throw all spare cash at the debt witht he next highest APR and so on, till they are gone. this is the cheapest and fastest way to pay off debts.

When the debts are gone, then he can start saving.

HOWEVER, there is one sort of saving that is OK when you have debts, that is specifically saving for non monthly costs. For example, working out how much xmas will cost (say £240) and putting aside 1/12 of that every month into a savings account so that when xmas comes around, you have the money there and waiting. Similar things for car tax, MOT, insurance, clothes etc etc. If you don't do this type of saving, you'll end up runngin up more debt.