paid off all my debt! yeahhhhh...now what?

gtw1989

I'm Gazz, I'm 26 and I've been in debt since 21....early midlife crises (don't ask). At the end of this month I'll have paid it off and I'll have a spare £1500-2000 a month that I'd have been use to shift off debt since I read this site and took my debt clearance seriously. now I'm debt free


I have a sharesave and directshare saving going on straight from paycheck but they're both long term and in the background. realistically I won't be doing as much OT as its not sustainable but I'll have £1000-1500 to save and I've been looking at what to do with the spare money. I currently bank with Lloyds but, alongside most other banks, the interest is rubbish and the world of investment banking sounds lucrative but is very daunting for someone who's never been in it.

I've come to a conclusion that first off maxing out my ISA (even at pitiful interest rates) and my share saving schemes through work (max limit of £1800) are the best things to do in terms of tax relief. but where do I go from there?

realistically I'd like to build a financial base that I can continue to build and use to supplement what income I have through work. any tips/help/advice is greatly appreciated.

YorkshireBoy

gtw1989 wrote: »

I currently bank with Lloyds but, alongside most other banks, the interest is rubbish

Really?...my Lloyds current account pays me 4% AER on £5K of my cash.

Cash ISAs would not be the best use of your cash...especially as you can get 3-5% AER on around £50K in current accounts.

Look at Santander, TSB, Nationwide, Bank of Scotland.

Also consider 5-6% regular savers, linked to M&S, FD, HSBC, & TSB current accounts.

WobblyDog

How about increased pension contributions, at least up to the level that attracts the maximum employer contributions.

If you are a higher-rate tax payer, or the pension scheme allows salary sacrifice, it might be worthwhile putting even more in.

Pincher

Go travelling, that's investing in yourself.


Nowadays I can't leave things alone for too long.


I did my big trip when I was 27, no mortgage, no debt, just £5,000. Thank god I did it then.

eskbanker

gtw1989 wrote: »

the world of investment banking sounds lucrative but is very daunting for someone who's never been in it

Probably best to start by getting to grips with the fact that 'investment banking' is a job for professionals, whereas I suspect you mean 'investing', which is what Joe Public can do! As you'll know if you've been spending time on this site, there are a number of threads about how and when to get started with investing, plus books, other websites, etc, to support your research....

atush

Start with saving 3 months spending in cash. Keep it in current accts as described.

Then use your ISA allowance, but for stocks and shares, not cash. This is best for long term savings. Alongside, if you haven't joined your company pension, join it today. and pay in half your age as a % ie 13%

gtw1989

yorkshire boy - 4% on £4-5k only in my current account smallprint. not on any after that I've looked at those at there isn't great amounts of interest to be had. however first bank do offer a 6% but its capped at £300 per month and needs a first direct, direct account with them which is £10 per month...that takes away a large advantage of 6% as on £300 a month it doesn't offer enough to break even. will check out the others.

wobbley dog - I pay a higher rate on my pension and have since I was an apprentice

Pincher - good advice, I've had some soft laid plans. will look into it.

Eskbanker - as I said I'm new to this terminology. thankfully you knew what I meant! ok I'll go through the threads.

atush - ok, I'll make that my first target.

thanks for all the comments.

masonic

gtw1989 wrote: »

yorkshire boy - 4% on £4-5k only in my current account smallprint. not on any after that I've looked at those at there isn't great amounts of interest to be had. however first bank do offer a 6% but its capped at £300 per month and needs a first direct, direct account with them which is £10 per month...that takes away a large advantage of 6% as on £300 a month it doesn't offer enough to break even. will check out the others.

It's 4% on £5k at one bank, 5% on £2k at another, 3% on £20k... it all adds up. How much are you planning to keep in cash? The first direct account fee can be easily avoided by paying in a monthly sum (or opening a bog standard savings account with £1 last time I checked).

gtw1989

So micro managing between accounts is unavoidable?

I'm planning on just keeping on saving for as long as possible to build up as much savings as possible, see how it goes over 10 years or more.

As for avoiding the charge, thanks!

kangoora

gtw1989 wrote: »

So micro managing between accounts is unavoidable?

I'm planning on just keeping on saving for as long as possible to build up as much savings as possible, see how it goes over 10 years or more.

As for avoiding the charge, thanks!

It's not really micro-managing. Between my wife and I we have 3 Santander, 3 TSB and a Nationwide a/c. Bit of a faff opening them and setting up any DD requirements but after that just send a bunch of money on a round robin between the various accounts via standing order (in one day and out the next day to the next account) - all we do is count the interest each month.

We could get an extra 1% from using some of the other accounts but are happy with 3% on each Santander account to simplify things. Not using regular savers at the moment as every spare penny goes into pensions as I'm close to being able to access mine with DW a few years behind..