Saving advice

mayhem007

Hi everyone,

I was just wondering if you could help me, I am lucky to have cleared all my debts by cutting back on unnecessary spending and by doing that i've learnt that I can manage to live happily and still be lucky enough to now be able to save about 600-800 a month and I was wondering if someone could advise me on how I could increase that and make my money work harder? e.g what should I do to really get the best out of the money that i'm lucky to save? :j

mayhem007

Linton

You dont say how old you are - I assume relatively young with no dependents. Sorry if that is wrong.

The advice is pretty standard:

1) Start off by building an emergency fund of perhaps 6 months salary or living expenses. This will ensure that you can get by the normal hazards of economic life without going into debt or raiding long term savings. It is nice to get the best rates you can but more important that the money is available immediately you need it. Here we are talking about cash ISAs, immediate access savings accounts and similar.

2) Then move onto longer term savings. Perhaps start with fixed rate bank deposits where you can get significantly better rates of interest.

3) And finally onto really long term investment largely based on shares or funds. This is for money that you dont plan to use for perhaps 10 years or more.


I guess you may have large expenditures coming up such as house buying. You can save for that with the fixed rate deposit money.

The other thing I must mention is pensions. You are a member of a company scheme?

atush

I agree.

1-6months in cash (use ISAs if you are a taxpayer).

2-Then, make sure you have a pension.

3-Then save into investments such as S&S Isas and investment trusts.

If you own a home, repay your mtg early. If you don't, save up for a deposit using 1, 3

mayhem007

Hi guys,

Thank you for the replies, Linton you are correct I am young (25) with no dependents, although I am getting married later this year.

1) I have got around £15k saved up in a nationwide saving account.

2) I was wondering if I would be better of drip feeding my monthly earnings into a high interest account?

3) Thats an excellent Idea and after I've saved a huge chunk that'll be a path I'll choose.

Both of you have suggested taking out a pension, can you recommend any good companies? my current company offers a company pension with hargreaves lansdown but my relative who works in insurance tell's me theyre not good?? he recommended legal and general I think ?

I read a post on another forum where someone kept transferring money from account to account and earned about £20 a month, is that legal?! :S

xylophone

I take it that the £15000 is not in ISAs - get this year's cash allowance (£5340) into an ISA right away or at all events well before 5th April (try Cheshire BS for a year or M&S) and get the rest into an on-line access account paying the best rate possible http://moneyfacts.co.uk/compare/savings/accounts/search/

On 6 April put maximum into cash ISA for the new tax year (£5640) - look for best offering.

You could use regular savings accounts for your monthly savings - you might need a couple as the amounts allowed are usually limited.

What exactly is your company offering through HL? Is there a company contribution?

mayhem007

xylophone wrote: »

You could use regular savings accounts for your monthly savings - you might need a couple as the amounts allowed are usually limited.

What exactly is your company offering through HL? Is there a company contribution?

Thank you for giving me advice

They are going to match what we contribute, i think there might be a cap though, would it be safe to assume that I should consider HL and then if i chose to leave the company I can transfer the contributions over to a new pension company?

My current regular savings i.e. my monthly salary goes into a nationwide account, but I am willing to transfer money into several accounts to potentially get a bonus of £5 etc per account, any idea which account I could use to do this? and also, does the money have to be in alternate accounts for a few days or is the following example below okay:

Nationwide > £800 (25th of Feb)

£800 transferred from nationwide to Barclays £26 feb (recieve the £5 bonus)

£800 transferred from Barclays on the 27th to Halifax (recieve the £5 bonus)

£800 from halifax back into Nationwide

End of Feb receive £10 (altogether in each account)

I apologise for perhaps being a complete newbie to this, but is that okay? I just really want to save alot of money to ensure that my kids are okay in the future

atush

Join your compoany scheme ASAP if they pay in a contribution alongside you. If they do, you have been throwing away 'free money' every month. If they don't, find a PP or stakeholder that you like the charges of, and the funds available to invest in. Cavendish online is a good place to start looking.


Your 15K in Nationwide, what is the interest rate? You are paying tax on it, so get it into an ISA paying 3% quick smart. Then another after april 6th, and easy access at %3 or more where you can find it. Drip feeingin into a regular saver can be a good idea for the new monthly moiney, as is drip feeding into an investment trust savings plan. You could do both.

xylophone

Hang on a minute - do you mean that the £800 you previously spoke of as savings is in fact your net salary (before living expenses) and before any pension contribution?

mayhem007

xylophone wrote: »

Hang on a minute - do you mean that the £800 you previously spoke of as savings is in fact your net salary (before living expenses) and before any pension contribution?

that's how much is left over when i pay my bills etc

xylophone

Then I'd suggest joining the pension scheme and using some of that as your regular monthly contribution.
When I talked about regular savings, I meant the type of account where you pay a regular amount (maximum fixed by the provider) usually for a year and at a fixed rate. Often this is a maximum of £500 but often less. Look here http://www.moneysavingexpert.com/savings/best-regular-savings-accounts

With regard to all this moving the money round x,y and z, frankly, I couldn't be bothered with it! Choose the best Bank accounts for your circumstances - move accounts if you find one better suited to your needs.

psychic_teabag

mayhem007 wrote: »

My current regular savings i.e. my monthly salary goes into a nationwide account, but I am willing to transfer money into several accounts to potentially get a bonus of £5 etc per account, any idea which account I could use to do this? and also, does the money have to be in alternate accounts for a few days or is the following example below okay:

Nationwide > £800 (25th of Feb)

£800 transferred from nationwide to Barclays £26 feb (recieve the £5 bonus)

£800 transferred from Barclays on the 27th to Halifax (recieve the £5 bonus)

£800 from halifax back into Nationwide

End of Feb receive £10 (altogether in each account)

For the Halifax reward current account, you need £1000 per month to get the £5. Don't know about Barclays. You could transfer £1000 from your salary before paying bills, or move £800 in, £800 out, £200 in, £200 out.

Do you use standing orders to automate the money movements ? If so, check what happens if the payment day falls on a weekend. You don't want to go overdrawn at Halifax - one day unauthorized overdraft will wipe out the benefit of the reward.

For Halifax, I don't think the money has to stay in overnight.