Complete noob! Help with saving/investments

punk84

Ok, please be kind, firstly a little back story. I am 27 male. I was employed for a long while doing weekend work cash in hand, found a real struggle finding work. I fell into debt. Well as luck would have it mine changed. I found the most amazing job, well paying, in fact generoulsy paying. I started in september.Since then i have paid off several debts. Bought a car, paid for the insurance (in full) and i have treated myself to a few things i have always wanted. Now, i feel the need to be responsible. I want to start saving, i want to get married, buy my own home. I finally have a means to do that. So my financial status is this.

I have a pension in which i put £30 a week ( this is matched by employer) I have my gym membership which is £20 a month. and phone bill which is £30 a month. I live with family at the moment. Other than a few other debts im paying off thats about it bar fuel and food etc.

I have zero clue on what or how to save. I could potentially save myself £500 a month but i want this money to work for me. I have no idea about isa's or intrest or anything else. Please help

punk84

Also, bare in mind. my credit has been shot to s**t by me being a fool when I was younger.

xylophone

You might begin with a cash ISA - you can contribute up to £5640 in this tax year and up to £5 760 in the next.
http://www.moneysavingexpert.com/savings/best-cash-isa

plunt

I would also recommend a credit card that helps you rebuild your credit history. Who do you currently bank with ? What sort of access would you like to the money? Do you want simplicity with accounts or willing to move money around every month ? Do you want the money to be risk free or you wanting to take some risk in terms of investments such as trackers , funds , p2p lending and so on. Answering these questions will help us asses you wants and then can come up with more tailored options.


But glad to hear you are trying to save !

jimjames

If you've no savings at all then building up cash at your £500 per month is the way to go, an ISA will mean you don't pay tax on it. Once you have a suitable cash buffer then you can look at other options but if it is money for buying house etc then things like shares wouldnt really be suitable.

Thrugelmir

Clear your debts first. Retain one credit card and close the rest once they've been paid off.

punk84

Thank you for the help everyone. I have one credit card debt that is about £600 which will be paid off in the very near future. I have 0 savings as i have been paying off debts and buying several essential things like a car ( just realised my bloody road tax is due!) How much would i need to save to get a isa thing? And what kind of credit card could i get to help rebuild my credit given that my credit history is poor. I really don't want a credit card even though i could afford one now. I would like to save for a deposit on a home. I want to be financially responsible.

punk84

I currently bank with natwest.

atush

The first step to becoming an ex-noob is knowing you are one now- so good start.

I don't knwo the name of the cards that build up a better history and be gotten with bad credit but someone will be along who does.

Why you want one, is that using one responsibly can build good credit, and teach you responsibility. They are great for vactions, emergencies, and always use one for travel and buying items over 100 quid (as by law they give you greater consumer protection). Also, once your credit is repaired you can get one that gives you something back. From cashback, to tesco points, to free flights, I have an old one I get free amazon vouchers from ( i use them for xmas presents and to buy Uni books for my kids).

So first step is to prioritize you debt. List them all in order of % interest and pay the higher ones first. Too late now, but apart from some small treats I would have said to do this before cars and treats ;-)

No point in saving in a big way until they are paid off. No point in saving and getting 2% or so on your savings but paying 16-27% on any debt.

But do save an emergency cash pot while you are paying this debt. This pot of say 500 or so will keep you from going back into debt if you have something break down (such as your car or white goods) or another emergency. your new CC might tide you over for a month, but you want to be able to pay it off when it comes due so you don't pay interest. This emergency cash pot should be easy access, and can be in an ISA. you can start an easy access one from as little as 1 quid.

After all debts are paid, the serious saving goes on. Save into regular savers. these tend to last a year at a good %, but enable you to build a pot which you can then transfer into the next years ISA (you can have one of these each year).

After you have 6 months spending saved for an emergency cash float, you can then save for specifics like house, marriage, children, holidays. This saving should be in cash if for 5 years or less, or equities (such as in a S&S ISA) if for longer.

And don't forget that you should raise your pension contribs too- put in at least as much as you need to, to get the max employers contribs (ie will they match more than 30 per week?). And even if you have maxed those, you ought to raise your contributions with part each pay rise (save the rest of any payrises in ISAs).

innovate

For cards, read through the Cards articles on the main site. A cashback card is best but you might not get one of them if your credit rating is bad. Did you actually check what your credit report says?

NatWest is one of the worst banks for savings - they pay no interest for current accounts, and their savings rates are not usually much good.

There's a current account article on the main site too. If you have bills to pay, the Santander 123 might be of interest. You might also be able to get £45 cashback for applying for the account via Quidco. They also have good savings rates, and specials for 123 account holders. But they cost £2/mth. If the cashback doesn't work for you, there are the Lloyds/BoS Vantage current accounts that pay some interest.

Your ISA definitely doesn't have to be with the bank at which you have a current account. Always worth checking the 'best ISAs' thread (summary in 1st post).

You don't need to close your Natwest account to take advantage of other accounts - you just need to manage what money you have where when.

punk84

Ok, so first step is to be completly debt free. So far i have calculated i have £1200 of debt to pay off. including credit card and a previous overdraft with a previous bank. My target is over the next two months to get that cleared. I am going to save approx £500 a month in cash in my safety deposit box. untill some time i decide what is fit to do with it.