First paycheck advice

gabberz010

Hello,

I'm just looking for some wisdom and advice re: savings. I've read Martin's pages on h2b isa, current accounts and savings accounts but for whatever reason I'm still not to clear on what is best for me.

A bit of background. I've just started my graduate job with an annual take home salary of approx 24k. I have a 38k student loan but I'm out of the overdraft and I've just received my first months paycheck.
I'm very fortunate that I'm living in rent free and bill free accommodation for the next 12 months. I just have to pay for my car (fuel, MOT, insurance) food and my mobile phone.
First thing I've done is open a h2b isa with Virgin money and deposited a lump sum of 1.2k. But I don't know what to do next. I still have my Halifax student account but I'm confused as to which current account would be best for me currently and if I have enough to open a regular savers account alongside it. Currently have 1.5k in my halifax account...some of which will be for living costs this month...the rest I want to save.


Any advice would be gratefully received.

Thanks

xylophone

You might consider opening a Nationwide Flexdirect account - interest of 5% on up to £2500 for the first year.

You also have access to the Flex regular saver - save up to up to £500 a month at 5%.

Remember to cycle in/out £1000 a month from an external account.

Rafter

No point in paying your student loan off - read Martin's guides on this.


Otherwise as xylophone says, find a strong interest bearing current account and regular savings account - apart from the help to buy ISA with the government topup, there is no point at looking at other ISA's yet because you won't be using your annual savings allowance.


Good luck


R.

themanfromamarillo

OK, first thing's first, you should try to get minimum 3 months, preferably 6 months of living costs saved as an emergency fund. High interest current accounts are a good place to put stuff but a) rates are in flux right now and b) you need to pass a credit check to get one.

The main thing here is the minimum monthly pay-in required. This ranges from £500 with TSB to £1500 with Lloyds. At the moment I would guess you are probationary at work so aren't paying pension contributions and you'll maybe get a month or two before you need to start paying tax. So you should probably work out how much you'll earn each month once those things kick in (along with student loan repayments) and how much you'll get in a paycheque and how much you'll have left over at the end of the month.

So for current accounts,

Use the amount you get in your paycheque and compare to the minimum payments for the different current accounts.

Are you paying direct debits? Some accounts require 2 direct debits to pay out of them to qualify for interest.

For regular savers,

If the amount you've got left every month is more than than the £200 you can put into a HtB ISA then you might want to look at a regular saver in addition to a current account. Another possibility (once you've got a bit saved) is more than one current account and just move money between those accounts for the minimum payment.

enthusiasticsaver

H2b is a good start.

You also need an emergency fund so a high interest current account or regular saver is good for that. First direct regular saver pays 6% and Nationwide Flexclusive regular saver pays 5%. The flexdirect pays 5% at the moment up to £2500.

Are you contributing to a company pension scheme? Even small amounts add up over time if you start young.

dunstonh

First paycheck advice

Cheque. not check.

The above responses have all been good so far.

Pincher

Blame Ben Affleck:

http://www.imdb.com/title/tt0338337/

The young are so easily misled.

gabberz010

Thanks for the advice everyone! I really appreciate you taking the time to reply!
Yes sorry for the Americanism - obviously should have been pay cheque.
I'll definitely look closer at the Nationwide account - just for clarification what do you mean about cycling money in and out?
I've already started contributing into a pension at 7.1%.
I just want to make sure my money is in the right place so any more tips are welcome!

Thanks again

bigadaj

gabberz010 wrote: »

Thanks for the advice everyone! I really appreciate you taking the time to reply!
Yes sorry for the Americanism - obviously should have been pay cheque.
I'll definitely look closer at the Nationwide account - just for clarification what do you mean about cycling money in and out?
I've already started contributing into a pension at 7.1%.
I just want to make sure my money is in the right place so any more tips are welcome!

Thanks again

Most current accounts with perks like in credit interest require money to be paid in every month.

Some people assume it must be their salary, but any credit will do, potentially from another current account you hold with another bank. That money can then be taken out again soon after.

Eco_Miser

gabberz010 wrote: »

just for clarification what do you mean about cycling money in and out?

As bigadaj said, you need to credit so much to the account every month, but if your salary is not enough for that, you can take some out and pay it back in again.
That process gets easier when you have two (or more) current accounts as you can just bounce the money around online.

You've been told the best accounts to use, but for completeness there is an often updated list here that is worth keeping an eye on as your cash reserves grow.

atush

gabberz010 wrote: »

Thanks for the advice everyone! I really appreciate you taking the time to reply!
Yes sorry for the Americanism - obviously should have been pay cheque.
I'll definitely look closer at the Nationwide account - just for clarification what do you mean about cycling money in and out?
I've already started contributing into a pension at 7.1%.
I just want to make sure my money is in the right place so any more tips are welcome!

Thanks again

Dont apologize, it is Paycheck to me