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YOUNG AND TOTAL NEWBIE TO ISA's

Hi, Looking for advice... Hope you can help - I've already found this site VERY helpful!

Im 20 years old. 21 in June,

I have 2 bank accounts (Visa Electron, Visa Debit) both with halifax
I have 1 Halifax Classic credit card which Is in the process of being updated to Halifax ONE credit card (Intrest free for 9mths on purchases)

I am looking to start saving for a house.. Money for a deposit/furniture. ANYTHING REALLY. Im happy at home at the moment and so is my Long term Girlfriend.. we both pay £100 board each a mth which suits us down to the ground! - not looking to move for a few years at least!

I work on comission, My earnings are on average between £1100 - £1400 take home a month after deductions

After working out my outgoings I can easily manage £50 GAURANTEED a month and UPTO £300 Dependant on social expenses (going out), bills like this month I have shelled out £300 on my car in services, new radiator, brakes, and some other minor things and £250 at the dentist but will definitely be able to put £50 minimum away a month...

I am looking at ISA's

Don't know much about them so I started to read this site. From what I can make out I need a MINI cash ISA

I would Like to be able to check my savings online

I love the portfolio on Halifax-Online where I can skip between my bank and credit cards in seconds!

I would Like ideally if possible to keep in house with the same bank as I have always maintained a good relationship with the Halifax!

I have been looking at this

HALIFAX
ISA Saver Direct Easy Access 5.15 % Yearly /

I want to know if anyone would recommend this ISA? If anyone has anything to point out to me? Anything I should check or look into before speaking with Halifax to arrange the ISA to be set up? accoriding to Moneysupermarket its fairly high in the list of the recommended ISA's...
????

IF YOU HAVE READ THIS FAR - THANKYOU! Your advice/Help is appreciated!

TAKEN FROM HALIFAX WEBSITE
>

http://www.halifax.co.uk/savings/directisasaver.shtml

Halifax ISA Saver Direct
The new Halifax ISA Saver Direct is managed over the phone which means you can earn a higher tax-free interest rate on your savings! These are just some of the benefits:

Open with a minimum of £1 deposit
Variable interest paid annually, up to 5.15% AER/gross p.a
Can view balance online
Invest up to £3000 in each tax year until 5th April 2006 (£1,000 in each tax year after this. You can make unlimited withdrawals of £10 or more by telephone or online without giving advance notice
Meet Government CAT Standards
if i had known then what i know now

Comments

  • kinesin_2
    kinesin_2 Posts: 92 Forumite
    Mobicate wrote:
    Hi, Looking for advice... Hope you can help - I've already found this site VERY helpful!

    Im 20 years old. 21 in June,

    I have 2 bank accounts (Visa Electron, Visa Debit) both with halifax
    I have 1 Halifax Classic credit card which Is in the process of being updated to Halifax ONE credit card (Intrest free for 9mths on purchases)

    I am looking to start saving for a house.. Money for a deposit/furniture. ANYTHING REALLY. Im happy at home at the moment and so is my Long term Girlfriend.. we both pay £100 board each a mth which suits us down to the ground! - not looking to move for a few years at least!

    I work on comission, My earnings are on average between £1100 - £1400 take home a month after deductions

    After working out my outgoings I can easily manage £50 GAURANTEED a month and UPTO £300 Dependant on social expenses (going out), bills like this month I have shelled out £300 on my car in services, new radiator, brakes, and some other minor things and £250 at the dentist but will definitely be able to put £50 minimum away a month...

    I am looking at ISA's
    <snip>

    If your saving for a house I suggest that you work out your budget and really start saving, with the housing market as it currently your £50/month won't be keeping up with continuing house prices increases.. effectively meaning your desposit as percentage of a purchase will be decreasing :mad:

    Do you have pension? For you age you have a very good wage and any money invested now reduces the about you have to pay in the future to equal your payout.. -

    Do you have any savings at the moment? If so get them in a mini cash ISA now before 6th April and the end of the tax year, as you can then open another mini cash ISA for 2005 and transfer in (if you want). This gives you the option of saving another 3k tax free :D

    With ISA's I normally go for highest rate that doesn't have closing/transfer costs - as these can be a sizable chunk of your cash. By only planning to save £600/yr you will make £30.90 (*IF* you invested it on day one, less if you do it monthly) some ISA's have closing fees of £27 :eek:

    Your wage puts you in a great position, but you will need to work hard to save within sensible time limts - remember most banks would say the maxmium repayment of a mortgage should be no more than %60 of your monthly take home.. so for saving I would suggest trying to hit least half this, i.e 30% or approx £450/month
  • Mobicate
    Mobicate Posts: 55 Forumite
    kinesin wrote:
    <snip>

    If your saving for a house I suggest that you work out your budget and really start saving, with the housing market as it currently your £50/month won't be keeping up with continuing house prices increases.. effectively meaning your desposit as percentage of a purchase will be decreasing :mad:

    Do you have pension? For you age you have a very good wage and any money invested now reduces the about you have to pay in the future to equal your payout.. -

    Do you have any savings at the moment? If so get them in a mini cash ISA now before 6th April and the end of the tax year, as you can then open another mini cash ISA for 2005 and transfer in (if you want). This gives you the option of saving another 3k tax free :D

    With ISA's I normally go for highest rate that doesn't have closing/transfer costs - as these can be a sizable chunk of your cash. By only planning to save £600/yr you will make £30.90 (*IF* you invested it on day one, less if you do it monthly) some ISA's have closing fees of £27 :eek:

    Your wage puts you in a great position, but you will need to work hard to save within sensible time limts - remember most banks would say the maxmium repayment of a mortgage should be no more than %60 of your monthly take home.. so for saving I would suggest trying to hit least half this, i.e 30% or approx £450/month

    My outgoings per mth

    equal - £150 car (Last payment due in Nov05! not long wooohooo!)
    £80 - car insurance
    £100 - board
    £25 - Broadband - down to £15 in next month
    £80 phone bill (mine and girlfriends)
    £5 phone insurance
    £21.60 - opticians (contact lenses)
    £100.00 - Petrol
    £20 5-A-Side Football

    These are all things that I ALWAYS end up paying!

    TOTAL - 581.60

    My variables include

    nights out - cinema/bowling - £30-40 a throw
    Clubbing at weekend - £80 with taxi/food
    clothes.. I spend alot on clothes and I shouldnt but I love shopping! anything between £50 - £150 on a pair of jeans £40 on a t-shirt, usually only 1 or 2 items a month! This is sad I know! Ive got the attituted a little do it now whilst you can afford to rather than later and regret not doing it!

    My last few wages all came in over £1200, last one in paticular was £1329 take home so I know I could save ALOT more than £50 - £450 A mth seems alot but I know it will help me loads in the future and it would be achieaveable some months/most months!

    £250 a mth is £3k per annum

    So how can I make good use of the extra £200 a mth if I did save it? as I can only have the 1 ISA?

    I just dont want to live a life of no luxury and stop doing everything I love. But i do really need to priortise! The saving will take more getting used to but I know its good for the future!!

    P.S. I bought some jeans in the sale the other day for £15 reduced from £80! (They had been reduced alot already but due to the odd size I am nobody wanted them - so I grabbed a wicked bargain) So I am trying already to loose the variables!!
    if i had known then what i know now
  • kinesin_2
    kinesin_2 Posts: 92 Forumite
    Mobicate wrote:
    £250 a mth is £3k per annum

    So how can I make good use of the extra £200 a mth if I did save it? as I can only have the 1 ISA?

    I just dont want to live a life of no luxury and stop doing everything I love. But i do really need to priortise! The saving will take more getting used to but I know its good for the future!!

    P.S. I bought some jeans in the sale the other day for £15 reduced from £80! (They had been reduced alot already but due to the odd size I am nobody wanted them - so I grabbed a wicked bargain) So I am trying already to loose the variables!!

    If your going to start starting ISA's are good - zero risk and no tax to pay :j
    You can only have one mini cash ISA per financal/tax year which starts/ends 6th April, and within this tax year you can invest up to £3K. This fits in well with saving £250/month. At the end of the tax end you can open another ISA and start again.

    While you like the idea of seeing your saving grow via the Halifax site.. it might just better to get a Abbey postal ISA and direct debt the £250 in.. once 2 months have past you won't even notice it's missing. It's one of life problems that we nearlly always all the money we earn.. and it takes effort to not just buy stuff because you can.

    I know you have a long term GF.. are most of your calls to her? Could you not look into finding deals that can save you here. e.g one-tel mobile to one-tel mobile are free - just watch the other costs.
    I'm currently paying £30/month for 500mins/100txt but I get £150 back evey 6months.. therefore working out at £5/month.. plus I get that lump sum to save - or give myself a nice bonus. It is a 3G phone and yes, is drops calls in my room (but nowhere else).. but I don't care because it's cheap!

    I took over my parent phone/internet/sky/cable..etc etc and saved moved them to using orchid dialers and call18866 + call1899 (see the Martins guides - and checkout his saving guide)

    Can you get you contact lense from the web? Could you stop buying CD's and just allmymp3.com. Get free DVD rental trials and use them?

    On your car loan - are you paying interest? Is so get a Egg card. Pay it off and then pay the £150/month to egg @ 0% - but don't touch it for anything else.

    Once you get into the habit of saving.. it becomes like a drug. Hit the specials /whoopsy counter in Asda and you get a random meal that fresh every time. I shop at TK-maks, H&M.. Asda for work stuff and just chill out.. with jeans at £8 not in the sale you start to wonder what the £70 extra gets you. I love wandering round B&M just to be amazed sometimes at what can be got.
    Maybe it's a mindset thing, but even just looking you realise that the same stuff you find in chains is normally available round the corner cheaper.
  • Midas
    Midas Posts: 597 Forumite
    Part of the Furniture 500 Posts Combo Breaker
    Yes it might be a good idea not to go with the Halifax for your ISA simply so that you can't see the money every time you check your banking online. As Kinesin says, just set up a DD and let it go out like a bill each month. I find that I don't really notice it this way and it reduces the temptation to spend it...

    Don't worry about trying to maintain a 'good relationship' with the Halifax. Just go for the best deals, where ever they are.
    Midas.
  • Mobicate
    Mobicate Posts: 55 Forumite
    the car was on finance (STUPID) and never again... I took it on 3 years with GE capital - Paying something silly like 17.9apr

    I have 9mths intrest free on my halifax card but will GE let me pay my balance by card? I had a computer - buy now pay 12mths later and when 12mths were up I called them yo pay it off with my switch card and they told me I needed to send a cheque in!

    no card payments were allowed... that was with dixons.. cant remember which finance company they use now though.. it was quite a while ago!

    Going to give them a call and request the total amount outstanding..... If I can pay the car off alot quicker that would be great - It seems like a hassle at first but I know its worth it.. Never thought about the paying it off on card idea!! Thanks!

    EDIT

    My phone bills are the lowest they can be - Trust me ;)

    Ex tmobile staff with half price line rental for life on all mine and family's lines...+ various other discounts

    I now work for another well known communications company so still know the ups and downs of the deals on the market ;)
    if i had known then what i know now
  • kinesin_2
    kinesin_2 Posts: 92 Forumite
    I don't think the GE cards lets you pay off loans, but cards like EGG let you transfer into your account, and hence you can transfer it to were you like :D - see the best credit card guides on this site - and keep track of 0% rates and when they run out.
    Ideal you won't pay off all debts 1st to redeuce any interest charges as these are always greater than any earning from saving.. unless your in a 0% apr zone.

    Don't worry about the finance, just learn from it. My GF's car loan was a dire 43% APR :mad: .. I soon sorted that, once I got real figures out of her!
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