Young family with roughly 30k what to do with the money

LondonRose_2

Hi all

I am looking for advice we are in the process of moving to a house, we have taken some extra money on the mortgage as had planned to do some building work ie. extension but have decided with a young family its best to enjoy the early years with the kids and not worry about money we will have about 28k. We are unsure what to do with the money and where to invest it if anyone could offer some advice to get us started.

Many thanks for reading........ Look forward to reading through the replies.........

bostonerimus

Not wanting to worry about money implies that you should just spend it....maybe on a home extension. If you do want to think about how to best use the money then you might consider.

1) pay off all high interest debt,
2) Put money for 6 months worth of expenses in the bank,
3) Fund your pensions
4) Fund ISAs....you might think about a junior ISAs for the children as well as your own.

eskbanker

LondonRose wrote: »

we have taken some extra money on the mortgage as had planned to do some building work ie. extension but have decided with a young family its best to enjoy the early years with the kids and not worry about money

Just to be clear, I take it you didn't secure the extra mortgage money from your lender on the basis of increasing the property value by extending but subsequently decided not to proceed?

It sounds more like you're looking to spend the money than save it but if you're wanting to put it away somewhere for the time being then a good place to start is the 'how to start saving?' article linked further up the page.

xylophone

You could regard it as your emergency fund and hold it in interest paying current accounts.

You might each open a Nationwide Flexdirect account and a joint Flexdirect.

You might each open a Flexclusive regular saver.

You might each open a couple of BOS Vantage accounts.

DDs required? Open a couple of Tesco savings accounts each on which DDs to pull from other accounts can be created.

And your "everyday account"?

http://www.santander.co.uk/uk/current-accounts/123-current-account?cid=ppc-123currentaccounts-google-dr-search-currentaccounts-Apr17&gclid=EAIaIQobChMIgbnok7-Q1gIVbrXtCh1mSQvGEAAYASAAEgIdnfD_BwE

killergibbo

invest the money into your new house. building a extension will add value to your home but speak to the right people first as they will know what sort of price you would get on that day with that kind of extension

kidmugsy

I am deeply suspicious of the purported wisdom of spending money on a house in the belief that in some years time a perfect stranger will think "just what I want!" and therefore pay an inflated price for the house.

By the time your children need extra room your job may have taken you to some different house anyway. Meantime you could follow xylophone's suggestions.

FatherAbraham

killergibbo wrote: »

invest the money into your new house. building a extension will add value to your home but speak to the right people first as they will know what sort of price you would get on that day with that kind of extension

Extensions rarely add value larger than what they cost to construct.

Warmest regards,
FA

Apathy

So sarah beeny double your house price for half the money is a bit of a scam/mis-sell? Always been a bit sceptical..

FatherAbraham

Apathy wrote: »

So sarah beeny double your house price for half the money is a bit of a scam/mis-sell? Always been a bit sceptical..

Television producers are rewarded for sensational superficialities, and under no real obligation to provide audited accounts for the projects presented.

One wouldn't take lifestyle advice from "The Only Way is Essex", and one shouldn't take investment advice from property-!!!!!! shows.

Warmest regards,
FA

tim_n

First off: "we have taken some extra money on the mortgage"

You mean you've increased your debt with a low cost loan. Don't spend it, it's money you don't have.

You don't need to spend money on kids to have a good time. They always appreciate having time with their parents rather than just being spoilt.

If you don't need the extension or repairs to the house to make it habitable, don't spend it. If you had horrendous damp/mould, leaking roof etc, take care of that first.

If you're willing to take a risk, you could put the £30k into S&S ISA for yourselves into a passive investment fund for 10 years and probably make more money than you're actually spending out. But if the market tumbles you could lose 5-50% of that easily and if the timing is really bad and you need that money back, you'll be taking the hit very personally.

I'd be tempted in holding at least £20k of it in low risk accounts (like a cash ISA) for emergencies if you don't have an emergency fund. Then start building up an investment fund to make some money you can afford to take a risk on.

IanSt

You've not given any details on salary, loans, investments etc, but if it were me and I'd borrowed additional mortgage money for a purpose that I was no longer going to do then I'd look to pay it back to reduce any loans, starting with those at the highest apr.

If you really wanted to spend the money on your kids then do it by investing the 30k on their behalf so they'll have something when they get to a suitable age. From the sound of things this is at least 10+ years away, so investing it into funds is likely to bring them the most money. There's lots of threads on this board about investing lump sums so have read through them.