Starting to save

jimjames

No idea what a FD is but I've marked it as spam.

Doshwaster

Archi_Bald wrote: »

It is fine, absolutely, and many people have had multiple accounts for many years.

It's very smart, in fact, to have accounts with different financial institutions, just in case any of them run into trouble - RBS, HSBC, Nationwide all have had operational troubles in the recent past, and no bank is immune to occasional failures.

Yup - while managing "multiple" accounts might be too much of a hassle, it is sensible to have at least one backup account in case of emergencies. Never keep all of your eggs in one basket, as the saying goes.

I do my banking through HSBC but I keep a Nationwide current account with a few hundred pounds in it just in case I can't get access to my main accounts and I have an non-HSBC credit card too. I also keep the emergency cards separate just in case I lose my wallet.

My other piece of advice for anyone who is thinking of starting saving it to work out where all of your money goes. For a whole month keep a record of every penny you spend and at the end I'm sure you will be shocked at where a lot of it actually goes.

derekbrian

I am really impressed by your idea of saving. My advice to you is that, first of all take advice of your father, he will rightly guide you as he will have better experience. You can also take the advice of financial adviser for knowing how you can save tax amount.

Sam_J12

Sounds like a great idea to me - if you stick to your plan then you will be very comfortable by the time you are middle age! A few tips I would give you:

1) Budgeting is really important. Decide with your partner how much you will each contribute to living expenses (e.g. 50/50 60/40) and stick to that. Cutting back on mobile phone contracts, cars, book holidays well in advance etc. can help keep costs under control and make sure you don't dip into your savings

2) If you are comfortable doing this, consider pooling the savings with your partner and ask her to match the proportion of income you are putting in. Your combined savings will grow much faster this way. Obviously only do this if you are fairly certain you will stay together long term.

3) I am not as enthusiastic about putting so much money in interest paying current and savings accounts as other posters here. You will almost certainly get a better long term return in the stock market. By all means utilize the 5%/6% offers that exist but with the amount you planning to save, that will only really only cover your reserve cash. I would not bother with Santander 123 (which only pays 2.7% on £20k) and other accounts paying 3% or below - in the long term it will cost you money as the stock market (based on historic 10 year periods) will give you a better return in the long term. I say put everything in stock and shares ISA, except for around 6 months living expenses.

4) Learn as much as you can about investing, pick a strategy that you are comfortable with and importantly stick to it. For example, one decent strategy, which is popular on these boards, is to invest money in passive funds that track stock market indices. In principle this should get you very close to the overall market returns, but studies have shown that typical investors get significantly less than market returns as they tend to panic during market drops and sell at the wrong time, buying back in after the market rises. So once you have decided on a strategy you should stick to it and ride out the lows.

Good luck!

enthusiasticsaver

You need to decide how much of your annual savings are going to be needed for a house, car, furnishings and solicitor fees and how much is to be kept for emergencies or long term savings.


I aim to save around £10-£15 k per year and split it according to purpose.


Long term savings go in to pension as additional payments or stocks and shares which you should definitely consider. You obviously can put it all into stocks and shares but if you need to withdraw when the market is low then this is bad news. You should definitely pay extra into your pension though due to you being a HR tax payer and that is a good habit to get into. Obviously only put money into that which you will not need out until retirement though.


Short term/Medium term savings I would put in interest bearing current accounts. I have 2 Santander 123 accounts earning 3% on £40k and 1 Nationwide flex earning 5% but that is only £2500. I have opted for a Coventry Fixed term cash isa (2014)at 2.4% until 2018 but now moved to stocks and shares isas from 2015 onwards. These are medium term to long term savings.


The biggest issue you have is to have to work out the balance between what you will need short term bearing in mind you do not have a property and are not married or have children which cost a lot and what you can afford to put away long term for your future. In the long run stocks and shares normally will give a better return but if you need it out when the markets are low then you crystallize losses so that is not good. I spent 2 months reading up about investments before taking the plunge though and I would recommend you doing the same. I drip feed monthly (plus have transferred a few lump sums) into a well diversified passive tracker fund of funds. Vanguard LS 60 which is written about a lot on this forum.

cashbackproblems

All I would say is try and get on the property ladder now as prices are shooting up (as I am finding), in a few years like they will have gone up far more than your 10k per year you are saving.

derekbrian

This is the best idea on your part. If you save today, it will make your future better. Great is your dad who is helping you in your goals.

lisa110rry

...and well done for joining quite a niche industry. You will soon find that after a few projects, assuming you do well, your name will become known and you will have the opportunity to travel and work abroad. Somewhere down the line you will decide perhaps that you would prefer to be self-employed and will start your own company.

You will meet lots of clever and interesting people who will help you in your career.

This is what I see in the gas and oil industry that I'm also part of - on the commercial side.