£2500 in three and a half years?

scottish_blend

I owe my dad 2500 from about a year ago. Rather than me paying him back monthly, he's said he wants it back as a lump sum when he is 65, which will be 3 years in June.

I'm looking to start some kind of ISA, to put money away regularly to guarantee me this sum of money - is this possible. I don;t have too much to spare, but obviously before I even start thinking about saving for myself I need to take care of this one - I can't deny my auld man his retirement!!

Can anyone offer advice please?

nearlyrich

Have a play around with the savings calculators at what's the cost and work out how much you need to save per month to reach your goal. There are some bonus accounts about but the average savings account won't pay out a fortune in interest although using an ISA will give you more of the interest as it's tax free. If you start now with the amount you need to save for three years you will achieve your savings goal before you need to give it back to your dad and you will have some leeway in case of bad months when you can't afford to save as much.

If you can't afford to save as much as it says you should it also gives you time to think of other ways to raise funds to add to the pot. Good luck.

Debt_Free_Chick

Ignoring any interest you receive, if you save £59.52 each month, starting now, then you would have saved £2500 by June 2010.

Is that something you can afford?

You put those savings in to (almost) cover this month's payment.

If you want to allow for interest - and there is a risk as you can't be sure exactly what interest rates will be for the next 3.5 years - but you can put in less each month.

If you assume interest at 5%, you need only save £53.28 each month - but if interest rates go down, you'll need to up your savings.

All this assumes savings in an ISA so you get the interest gross.

scottish_blend

Cheers - debt free chick I reckon I could manage about £50 a month yes. When working out my budget I was looking at paying around £100 to credit cards, but it was going to be very tight for quite some time. The bank charges settlement negates that now,and so I'm looking to settle off my dad first.

Nearlyrich - thank you too- those calculators are what Ive been searching the net for but can only seem to find lump sum calculators via google. Must go backand read up on my boolean notes from college

Is National Savings a good option these days - I remember when I was younger they used to be the safe option, but then when I was younger and listening to the adults talking, it was in the dark days of the late 70s, the 3 day week et al Are they still the way to go, or is everything much of a muchness now?