A MF day begins at midnight

midnight_child

Things are progressing well this week on the renovation. Plasterer has been and gone and I should have a couple of rooms finished in a few weeks, just need to slap a bit of paint on and ring up a carpetting company that has a perennial sale on!!

Money wise I had to put quite a bit on the CC, but it has meant I have avoided dipping into the emergency fund and I will get paid before the statement is due so not an issue to pay off all in one go.

Tax free saving: Not a NISA surprise
One thing that has been running through my mind though is the question of how I save my emergency fund. I got a letter from the bank saying that my cash ISA will be reducing to 1% APR. They cited the increasing availability of cheap credit, making their present rate unaffordable (though I've not had one putting my mortgage APR down yet!!). I know that ISAs have tax free benefits but I can do far better elsewhere in terms of rates.
Now I do have some held in shares (also under ISA rules), and I could if needed sell to release the cash into my current account within 3 working days, but I would much rather keep something in cash form that is easily available, so im thinking of dumping cash ISA for a non-tax efficient savings account that pays a far better rate. I cant see this account offeeing more generous rates any time soon, and if they did then I could just shift it all back over (maybe keeping the account open with say a fiver in it).

A few of my real life friends are saying "but its good to keep it in there as you lose the tax free benefits in subsequent years", but I dont see how this is important.
Are there any other considerations for me keeping my money in this account paying such a measly interest? It currently contains roughly £3500 and I am not going to be able to subscribe the full amount in this tax year.

Am I missing something?

MC

gallygirl

If you had been saving in ISA's and their predecessors for donkeys years and had 100's of thousand and thought interest rates were going to rise sharply, then yes, good to keep the tax free status. Otherwise, no . IMHO

midnight_child

Thanks gallygirl,

That is exactly what I was thinking!!

MC

egoode

Hi Midnight Child, I just finished reading your diary and you are doing so well.

Do you mind me asking who you do your share trading with? I'm currently looking at starting a portfolio probably with £5000 initially then increase it over time.

I was wanting to get it under the ISA rules but getting really confused about all the different fee structures and costs for trading. Also lots seemed more geared towards funds whereas I would rather invest directly in companies I've chosen like you are doing. I don't have many friends interested in things like this and my family all live in Australia so struggling to get any recommendations!

AGirlWrites

Good afternoon MC and congratulations on a great MFW Diary.

I just read the whole thread from the beginning. I'm 28 and just got my mortgage offer through and waiting for a completion date now. I'm hoping to get my over payments up to scratch asap. You are a real inspiration being of a similar age.

Subscribed!

midnight_child

egoode wrote: »

Hi Midnight Child, I just finished reading your diary and you are doing so well.

Do you mind me asking who you do your share trading with? I'm currently looking at starting a portfolio probably with £5000 initially then increase it over time.

I was wanting to get it under the ISA rules but getting really confused about all the different fee structures and costs for trading. Also lots seemed more geared towards funds whereas I would rather invest directly in companies I've chosen like you are doing. I don't have many friends interested in things like this and my family all live in Australia so struggling to get any recommendations!

Think I may have mentioned this before but I trade with H$BC, and it is called an investdirect account. I think most major banks have something similar. I pay a £12.95 fee per trade (buy or sell), and this is a flat fee no matter the value. This is actually quite pricey and there are accounts that charge as little as a fiver. However, this account does not have any monthly/quarterly charges and so works out well for me as I trade fairly infrequently. I dont know enough about the different options to say I would recommend this or any other platform - maybe this is a question better suited for the investments board, or a new idea for an MSE review.

I will say that it does all that I want it to. I find that its easy to use and you can buy/sell with just a few mouse clicks, though that may not always be a good thing

MC

midnight_child

Hi AGirlWrites & welcome :wave:

I will keep my fingers crossed that you have a speedy and relatively stress free completion. I dont know anything about your situation but from my experience I found it much more of a struggle to overpay at the beginning as I found I always needed to buy essential stuff for my place. All the random bits that you dont have while renting and dont really think about budgeting for, but are going to struggle to live without - stuff like a hoover, lawnmower, that useful large saucepan your housemate had, odd bits of furniture etc. It all adds up very quickly but hopefully will be expenses that once made are not required again, at least for a few years.

It takes a long time to clear a mortgage even with overpayments, so dont beat yourself up if you cant pay off large sums straight away.

Good luck
MC

midnight_child

I have just seen my latest pay slip and my take home has increased by about £75 per month :beer:

Upped the overpayment standing order to £500 from september, well it seemed a nice round number. This would see me mortgage free in 9 years if I can keep it up each month (and rates dont change).

Its now full steam ahead to January when I will remortgage, though it may require me flogging some shares and dipping slightly into the emergency fund to get the best possible rate.

MC

giblet1979

Hey MC,
Great news on the pay and overpayment increase. 9 years would be fantastic and even it rates do go up, you're still setting yourself up for a much earlier financial independence than many people could even dream of! Very inspiring x

smifffy1989

midnight_child wrote: »

I have just seen my latest pay slip and my take home has increased by about £75 per month :beer:

Upped the overpayment standing order to £500 from september, well it seemed a nice round number. This would see me mortgage free in 9 years if I can keep it up each month (and rates dont change).

Its now full steam ahead to January when I will remortgage, though it may require me flogging some shares and dipping slightly into the emergency fund to get the best possible rate.

MC

We are in a similar situation whereby we have improved our house and equity. The mortgage is due in February and we are very close to the next LTV down.

Good luck!