Where to start when you have no money!??

L011ip0p

Hi,

Ive been reading the guides about savings and bank accounts.. but now I feel a little depressed
it seems that to have any of these good accounts, or to have a savings account you've gotta have a lot of money to begin with!!!

I work part time earning under 500 a month and my husband is self employed so doesn't have a guaranteed income so we cant use one of these accounts where you have to put a certain amount in.
In the last year we managed to save about 1000 and put it in an cash isa (lloyds) to find that we receive 0.9 percent interest?!?!! and Nothing on our current account!

is it worth moving it? for that little money??

soay_2

I think it's always worth putting your money in the best a/c however little it is even if it's just to have the satisfaction of denying the financial institution of having your money on the cheap.

I think you should congratulate yourself on managing to save £1000 when you are on a low income. Everyone has to start somewhere and being proactive to maximise your interest pays off in the long term.

As your earnings are below the tax threshold you could also consider taxable savings accounts as you would be able to register for your interest to be paid gross.

A good reference to top savings rates is http://www.savingschampion.co.uk/

donniej

£1000 may not be much, but whatever you have saved it's worth getting the best rate you can for it. It's almost a question of attitude - you may not have much, but you want to make it work for you as much as possible. You should definitely be able to find something that gives you more than 0.9% (moneysupermarket is usually a good place to start.)

A useful way of thinking about saving is to think of what you're saving for. What's your saving goal? Is it for a rainy day, or something more specific like buying a car or putting a deposit down on a flat? Once you understand that better, it becomes easier to think of what do do with your money. A cash ISA is definitely a good place to start though.

Newbie2saving

Also over time, the interest builds up, so in a few years time, you will have earnt ~£100 in interest alone by ensuring your ISA is getting the best rate (currently around 3%), that is this pot alone, and if you can add to it, all the better!

Good luck.

psychic_teabag

L011ip0p wrote: »

Hi,

Ive been reading the guides about savings and bank accounts.. but now I feel a little depressed
it seems that to have any of these good accounts, or to have a savings account you've gotta have a lot of money to begin with!!!

I work part time earning under 500 a month and my husband is self employed so doesn't have a guaranteed income so we cant use one of these accounts where you have to put a certain amount in.

Ignore what Martin says about minimum salaries. For your convenience he calculates the equivalent salary to get the perk, but you don't need to earn that. You literally just need to put that money in from somewhere.

So just keep your £1000 in, say, a Santander current account earning 5%. Each month, push it into an account such as the Halifax Reward current account to get your free fiver(s). You can have three of them between you, so that's £15 per month. Then transfer it straight back to Santander, to satisfy its funding requirements.

EDIT: the best savings accounts don't have high minimum balances. Santander esaver can be opened from £1.

Newbie2saving

psychic_teabag wrote: »

Ignore what Martin says about minimum salaries. For your convenience he calculates the equivalent salary to get the perk, but you don't need to earn that. You literally just need to put that money in from somewhere.

So just keep your £1000 in, say, a Santander current account earning 5%. Each month, push it into an account such as the Halifax Reward current account to get your free fiver(s). You can have three of them between you, so that's £15 per month. Then transfer it straight back to Santander, to satisfy its funding requirements.

EDIT: the best savings accounts don't have high minimum balances. Santander esaver can be opened from £1.

Great suggestion psychic teabag, forgot about these & I have 3 which equates to £180/yr. Nice income, for keeping £1 in each account.

calypso_rhapsody

Blast - psychic beat me to it! Yes use the £1000 to move it in and out of a Halifax REward account (I think i read that this account is being withdrawn in March - check and you may need to move quickly if so). The £5 is net of 20% tax and you are a non-taxpayer - you will need to complete a form from the HMRC website (an R40 i think) to get the £1.25 back. So that's £6.25 a month for just sending £1000 in and out of the Halifax Reward account. You could even set up three (one each and a joint) and cycle the money round .... £18.75 pm - or £225 a year. (Mind you if your husband pays tax then he won't be able to claim the tax back).

Just one tip - if you set up the transfer of the £1000 as a series of SOs then don't make them too close to the month end as a weekend can tip the payment into the following month.

And of course, whilst it's not in a Halifax current account it can be somewhere earning interest - though it would be good if it was an account that you can set up standing orders out of so that you don't have to do it manually each month!

L011ip0p

@donniej we are saving for lots of things! our cars getting on so we need to think about changing that in a couple of years, plus we havnt had a honeymoon away yet.. and been married 2 years lol so that would be nice..just to see the sun for a change would be fab!!

Right ok i can set up standing orders from my lloyds account so could i use that to keep sending money into the halifax account? plus don't u have to b an existing halifax account holder to get the rewards account??

I apologise for the 20 questions but im pretty new to all this, since the age of 16 i put my money in lloyds n haven't thought about it since! Its only since being married and having my own place that ive realised how complicated paying bills is!!

indie80

calypso_rhapsody wrote: »

You could even set up three (one each and a joint) and cycle the money round .... £18.75 pm - or £225 a year. (Mind you if your husband pays tax then he won't be able to claim the tax back).

You can claim the tax back on a joint account even if one of you has to pay it, you just get 50% of it back. I read that some banks will allow you to register so that it only deducts 50% of the tax others would require you to claim a rebate at the end of the year.

ada1988

start with what you have and what you can get.
many successor win from zero.Just insist.

psychic_teabag

L011ip0p wrote: »

Right ok i can set up standing orders from my lloyds account so could i use that to keep sending money into the halifax account? plus don't u have to b an existing halifax account holder to get the rewards account??

Yes, you can continue to keep your Lloyds account, and you can set up a standing order to send money to Halifax. I happen to do it manually each month - don't want to risk Halifax going overdrawn with an automatic payment back out if for some reason the money didn't arrive, in case different banks deal with bank holidays in different ways, for example.

The stuff about rewards for existing account holders : I think "existing account" means a current account : so by opening (and funding) a current account you earn rewards on savings accounts. But I think that scheme may be discontinued now.

(Oh, speaking of which, I saw on here yesterday that the Halifax reward current accounts may be withdrawn in March.)

What kind of account do you have with Lloyds ? If it's a classic current account, have you enabled the "vantage" option ? That will give you some interest on the balance. (Need to fund with £1000 per month, but you can just use the same £1000 that you are sending to Halifax for that.)