Saving a small amount over a long period of time, need guidance please

coastline

khampson wrote: »

My rainy day account currently is £400 and I pay £15 a week into this, I coukd put extra money to this and maybe pay and extra £5 to £10 a week into it. My rate is rubbish 0.25% in a isa. I am just at a point where I want to put money away and not miss it.

some regular savings accounts might help...pity they aren't online..

http://moneyfacts.co.uk/savings/regular-savings-accounts/

A regular investment plan might be one to consider as you can invest at intervals..
I'm wondering if these plans include ETF's as a tracker fund would be step in the right direction..

http://www.halifax.co.uk/sharedealing/our-accounts/regular-investing/

DiggerUK

Keep adding the same to the rainy day a/c.

As %rates are dire go for Premium Bonds. Minimum £50 SO once initial £100 invested, and who knows.

If good fortune smiles on you consider gold, 5+years as a minimum time frame.
Best of fortune.
..._

khampson

I did consider a Santander 123 account but I have a Halifax reward and already get £5 a month so when I compared it was not worth the change. I intend to keep topping up my rainy day account but not sure when to cap it. Keith

DiggerUK

khampson wrote: »

........... intend to keep topping up my rainy day account but not sure when to cap it. Keith

6 months readies is commonly accepted as a goodly amount.
..._

enthusiasticsaver

JohnRo wrote: »

Why not use a Santander 123 account? I don't know your circumstances but the utility bill rebates seems to easily cover the monthly fee in most cases.

Having a cash ISA, with financial repression as it is, doesn't make a lot of sense unless you're already sitting on a balance that would take years to ISA wrap again if withdrawn, or you're putting in close to the limit each year.

I think it is really only worthwhile having this account if you have more than £3k to get 3% and you also need to fund it with at least £500 per month. There are other current accounts which pay higher interest on low amounts like Lloyds, TSB and Nationwide so the OP should look at those imo.

khampson

DiggerUK wrote: »

6 months readies is commonly accepted as a goodly amount.
..._

Is this 6 month worth of wages or 6 month worth of bills?

Eco_Miser

Open a TSB Classic Plus, in addition to your Halifax Reward. Remember to opt for paperless statements AND communications.
Move your £400 rainy day money into it.
Each week (I presume you are paid weekly) move £125 from Halifax to TSB and £105 (or less to save more) from TSB to Halifax.
When you have a reasonable amount, perhaps after a year, decide how much you want to keep as instant access rainy-day money, and use the rest to buy an investment fund.
Keep saving, and periodically add to your investment.

khampson wrote: »

Is this 6 month worth of wages or 6 month worth of bills?

Yes, depending on who is saying it.

I'd go for 6 months of bills, including annual bills, Christmas spending, and enough to replace at least one large appliance.
While saving to invest is important, I think it's more important to be able handle life's little emergencies, and certainly all predictable expenses, without having to borrow.

bowlhead99

khampson wrote: »

Is this 6 month worth of wages or 6 month worth of bills?

If, per your original post, your only spare money is a fiver a week, then they approximate to about the same!

Generally 3-6 month's outgoings is what you would try to cover with an emergency fund, in the hope that you could fix the problem during that time. 6 months full net salary would be way more than many people need because in practice if they had a big problem they would not carry on frittering away their full salary as if there was no problem.

An emergency fund / rainy day fund can be designed for a lot of things. What if you were out of a job for 6 months or had some injury or accident that stopped you working. What if you had a breakdown or home emergency - like needing a new boiler, or your car gives up, or your house burns down or someone nicks everything and you have to fund everything yourself until you get the insurance money? All of those things need you to have money in easily available cash.

Of course, investment ISAs are liquid too, you can always get the money back in a week or less- but if you hold stocks and shares as an investment then you might get a disappointing result if you have to cash them in for an emergency at a time when they've fallen in value. You'd want to be able to leave them untouched to grow, rather than dipping in. So, a separate emergency fund is very useful although the absolute amount in pounds, or the number of months' normal outgoings that it represents, is probably different for everyone.

khampson

What type of isa could I use to run along side my emergency fund? as I say I don't require the money I save and overall I can comfortably save £25 a week including topping up the emergency fund. I have an halifax account and I'm happy with the service I get from them So do these offer me any options? My emergency fund is currently sat at £415 in a halifax isa saver online giving me 0.25%. Would I be better shifting the emergency fund elsewhere to get a better rate considering I may need to get at some of this money from time to time? Thanks

Eco_Miser

The only ISA worth having is a Stocks & Shares ISA for your investments, and I'd leave that until I'd got rather more instantly available cash.

Have another read of the previous two posts and consider carefully the suggestions therein.