Savings Ideas/Help

Spuggy200

Hi everyone,

I have been reading all morning (early bird), but can't quite figure out where to put money and what is the 'clever' way of saving/pensions/investments.

Background

I run a company and take £1k per month as a wage, wife takes £1k and bills are around £1500 for everything, so £500 to play with each month which is plenty. From July we are taking dividends and that will amount to around £4,750 each every 3 months but not sure what to do with it.

We don't need anything, apart from a holiday (£1500 max) and I intend on having a £4k budget for a newer car in October (second dividend payment)..., and this is why I'm looking at MSE for inspiration on where to put money. No pensions or savings yet - married (been together 10 years though), moved house and have a baby due very soon all of which have absorbed previous savings. If all goes to plan business wise then I should have £25k-ish in savings by next March after all taxes are paid.

I'd love to build a house and being self-employed mortgages are a no-no for at least another 2-4 years. I'd really like to be mortgage free and pay cash for a self-build even if it means it will take 10 years to do that. I'm more than happy renting for now (and have no other choice).

Ideas from me include:

Invest in websites - this is part of my business anyway and ROI is high for my clients but I want to be my own client and have 5-10 websites.

Buy to Let - full of headaches I imagine.

Buy to Sell - more inclined to think along these lines as I'm very handy DIY and have many friends/contacts in various trades. Living in the north east has its perks with cheap(er) housing.

Invest in a new business in case anything changes within my company - ie. car sales (I'm very handy with cars too and help my friend who buys and sells and makes £1k profit on each car). With my website help, we're actually going to be joining forces officially, but I prefer to do things myself but it would mean that the dividend money would be thrown at cars and it's always a gamble no matter how careful you are.

Savings? - No idea, got an ISA to fill but 1.5% of any figure doesn't exactly blow my away.

Pension - joint or 2 x single? Where?

Hope this is enough info and thanks in advance if there are any replies.

Spuggy200

Just to update this, first dividend payment was £3,650 each, paid off debt for both of us so we are debt-free (hurrah!), sold my car for exactly what I paid for it 18 months ago - bought another £1200 less than market price. I always buy second hand as I don't want to pay VAT and have an asset that depreciates. I can't see the new car depreciating more than £1200 in the next two years, so I'm happy with that for now.

I've been investing in more websites which are earning money hands-free, taken on new clients and am still looking to invest in something else. Still don't have a clue about pensions.

xylophone

https://www.gov.uk/workplace-pensions-employers

http://www.theguardian.com/small-business-network/2014/jun/23/small-businesses-auto-enrolment-pensions

https://www.gov.uk/new-state-pension/overview

You will need to build an emergency savings pot - have a look at interest paying current accounts.

Santander 123, Club Lloyds, TSB Classic plus, BOS Vantage etc.

These can also be used for your house savings with clever use of in/out standing orders.

Spuggy200

Well, this has been a horrendous year. Business struggled with the loss of some big clients and never recouped until now when it's getting slightly better.

Had to get some credit cards in the summer putting me in 4k debt plus a 1500 tax bill that I wasn't aware was coming (thanks accountants!!), so just managed to consolidate with a stupid high APR loan until the CCJ comes off my record in March when I'll refinance to another lower APR one (should only cost 600 in interest from now to then).

Sold that car recently as the engine blew up a few days after I wrote the last post netting me a 2k bill and only got 2400 for it when I paid 2600 for it and the 2k engine bill. Gutted. Got a cheap runaround now which is twice as frugal and half the price insurance.

As for savings, there is none as of yet. Planning on 1k per month from January, paying this loan off as fast as I can when I refinance it. Hopefully once March is out of the way, I should have a 900+ credit rating, 5k debt and 3k in savings. Once I have 5k in savings I will try and double the repayments on the loan and get it paid off quicker. Plan is to have 25k saved by end of 2016 for a house and the debt paid off at least 6 months before then.