Enough is enough

LLHD

For as long as I can remember I've always wanted savings. I managed to save for my first house - so I know I can do it! But now that we're in the house any money I had has gone and every month I'm down to the wire. I've saved £300 in 2 months but that's now going to be holiday spending money - living life seems to get in the way of any financial security. I've identified a pattern in myself and my spending/saving habits & I've come to realise that if I'm going to be a successful saver I need an account where I can save say £100 a month over 5 years & get the lump sum back at the end of that term but what is an account like that called? I've looked at fixed rate bonds but you need a lump sum which I don't have, anyone know of an account I can pay into monthly but I don't want to be able to access the money for 5 years. I'm not too fussed about interest etc I just need to get saving & don't have the discipline to do it without having no access to it otherwise I'll spend it! Any help would be much appreciated

Fatbritabroad

Regular saver?

dunstonh

living life seems to get in the way of any financial security.

It is about making choices and having priorities.

I need an account where I can save say £100 a month over 5 years & get the lump sum back at the end of that term but what is an account like that called?

Regular saver if 5 years. S&S ISA if you move towards 10-15 years.

Eco_Miser

I'm not aware of an account that does exactly what you want, but two possible alternatives come to mind:

1. Open a new fixed term amount every month (or quarter). The amount in each will be small, but they will be locked away.
2. Save for a year in a Regular Saver account, then put the resultant lump sum into a fixed term account. Just avoid the temptation at the change-over.

In either case reduce the length of the term for later investments, if you want all the money in five years time.

PeacefulWaters

don't have the discipline

With the greatest respect, you're a homeowner now. Grown up. Adult.

Your home will need repairs. Improvements. Furnishings. Electrical items will fail.

You've proved you can save with the house deposit. Now get a grip on saving for home ownership's unexpected expenses.

Or you'll end up in a spiral of credit card and loan debts.

It's not about the type of account. It's about your commitment to making sure when it all hits the fan you can deal with it financially without fuss and without debt.

AnotherJoe

If you are that tight on money, you cant afford to go on holiday and shouldn't have booked it.

As said, start up an emergency fund for unexpected (but inevitable) expenses, and dont book any more holidays until you've got at least 3 months (and 6 months is better) put away.

JohnRo

Cake, have, eat, decisions.

lippy1923

Agree with above. Regular saver sounds a good option and when that expires (usually a year) put the lump sum into an interest paying current account and then start a new regular saver again.

Flobberchops

A product that closely matches what you're talking about would be something like a fixed-term ISA; you could put money away regularly but it would effectively be a "sealed pot" for the duration of the term.

That's not to say you should do it though! It's arguably the worst possible use of your ISA allowance, and you'd have to be rather foolish to open a fixed-rate investment at the very bottom of an interest rate valley.

With a bit of extra willpower you could get better returns with one or more regular savers, or even P2P.

My tip is to set up regular savings by standing order immediately after payday, as it's human nature to find ways to spend any disposable income. It may superficially seem more prudent to "put away what's left at the end of the month" but in practice that will tend to be nothing! Make a commitment to immediately save 10% of each pay packet, I'll bet you won't even notice it, but it can add up handsomely over time.

weenie15

Or, after setting up the emergency fund of at least 3 months, put £50 into a regular saver (as mentioned by other posters) and the other £50 towards your holiday (a holiday fund).

Have your cake and eat it, it'll all just take a little longer, that's all.

fiisch

I'm re-gifting some of the advice I received on these forums - have a read of Mr Money Mustache's blog. Essentially, he preaches about living well within your means and putting aside a significant proportion of your income into saving and investment.

The trap that it's all too easy to fall into, and I know because I've very much been guilty of this, is that our consumerist society means we can get instant gratification and defer the pain (payment), from our cars, mobile phone contracts, sofas etc...

Have a critical look at your outgoings and look where you can trim - do you need that particular Sky package? Are you on the best utilities deal? Why not opt for a sim only deal next time around? Are you giving money away to insurance providers by paying monthly and coughing up for their extreme APR's?

You shouldn't need to physically lock your savings away to avoid the temptation - it's about changing the habits of a lifetime. Is a great blog, and a very interesting take on personal finance (although I must confess some of his methods are a bit extreme for my tastes!).

I wouldn't advise locking away the first bit of savings you can muster together - you should have a few months in a ready access account for emergencies/unforeseen circumstances.