Could I be better with my money?

PeacefulWaters

Target £5k for the emergency fund. Minimum.

10% of salary into pension isn't enough. Start contributing more. It's possible that you're paying higher rate tax and higher contributions could reduce or remove that liability.

xylophone

Have you looked at interest paying current accounts? A useful home for emergency savings.

Increase your pension contributions?

JISA for new baby? https://www.gov.uk/junior-individual-savings-accounts/overview With a long timescale you might want to consider the stocks and shares option.

A stocks and shares ISA for you and your spouse?

Archergirl

42K a year and 1k savings, unbelievable............If only I ever had earned that sort of money.

PeacefulWaters

Archergirl wrote: »

42K a year and 1k savings, unbelievable............If only I ever had earned that sort of money.

I get your point completely.

But many will testify that as their income potential rises so do their expectations of life.

So they stretch their income to buy the bigger house, the better car and whatever else it is they need to keep up with the Jones's. The bigger mortgage. The higher council tax.

The tax man also takes a bigger percentage of income (£6k on £40k compared to £2k on £20k). There maybe a temptation for the partner of the big earner to stay at home or work part time, thus not maximising a combined income potential. Overtime opportunities often don't exist above a certain salary level. At least not paid.

But as I said, I'm with you. £1,000 saved gives a couple of weeks contingency should employment cease. Most big employers take at least a month to get from application to appointment. So it's a best case of two months to the next pay packet. There's enough time to miss a mortgage payment and damage your credit file for years to come.

Paying £4,000 into a pension for 40 years implies getting £8,000 a year out for 20 years after retirement. Ok if combined with a £7k state pension but not close to £40k and very, very limiting if you want to retire before your late 60s.

Definitely more needs to be done.

PenguinJim

kidmugsy wrote: »

Hands up everyone who didn't look askance at the weekend expense and the trainers!

As they wrote "65 New trainers" I assumed that £65 bought a pair for the OP, their partner AND their child!

OK, that's a bit harsh. I spent £45 on a decent pair of shoes seven years ago, wore them every day for work, hiking, shopping... just about everything, and they finally fell apart last year (I *will* get around to gluing them eventually!). If you're going to get 6+ years out of them, £65 isn't mental!

But to the OP: YES! You could be doing far better with your money. And with a young family, you should be.

joeyvicks

PeacefulWaters wrote: »

Target £5k for the emergency fund. Minimum.

10% of salary into pension isn't enough. Start contributing more. It's possible that you're paying higher rate tax and higher contributions could reduce or remove that liability.

What % would you recommend I up it to?

joeyvicks

I do agree with you all, thanks for the comments. I will aim to save 5k as an emergency fund over 18 months which is £278/month. This should allow me to continue having a few perks each month.

Would anyone recommend I see a financial advisor ?

PenguinJim

Why don't you go without any "perks" for two months and bank £2,800? Eight weeks will fly by.

PeacefulWaters

joeyvicks wrote: »

What % would you recommend I up it to?

Personal view? Aspire towards 20%, even if it's achieved over three or four years.

But look at maximising employer contributions. Before upping your contributions make sure your partner is maximising their employer's contributions. Consider Sharesave schemes and other employee share programmes if available as ways of adding to pension provision.

Would anyone recommend I see a financial advisor ?

They are unlikely to focus on how to free money up within your budget. Merely where to invest it. I'm not sure it's worth the cost.

ColdIron

joeyvicks wrote: »

What % would you recommend I up it to?

Ballpark figure, 10% but as you are hovering around the higher rate tax threshold I would suggest whatever percentage takes you back under it including interest from savings. This way you pay no HRT on earnings or savings and your pension gets 100% of the benefit. Review it every salary increase, it's free money