21, Need direction/help with money.

dawyldthing

https://news.sky.com/story/interest-rate-rise-blamed-for-stall-in-house-price-growth-11149948

theoretica

If you are like me, the first time you invest money you will keep looking at how it is doing and getting the jitters every time it goes down. I am very glad I started by investing a relatively small sum so I got used to watching it go up and down before moving towards investing more.

You mention a car, I think it would be wise to consider how much you are likely to want for its eventual replacement and on what sort of timescale, as you might want to build this in cash in addition to an emergency fund.

JSCB

Jonny1875 wrote: »

Thanks for all the replies, very helpful!
It seems like a common suggestion is to make more use or better use of the 9K I have in my Instant Access Isa, I was thinking therefore should I transfer £200 every month from this to my Help To Buy Isa instead of adding to both simultaneously? and do this until my Instant Access Isa is at a level where it is simply an emergancy fund?
It seems like the Help to Buy ISA is the right move for helping myself to get on the property ladder in the next 3-5 years however i see the benefits suggested by JSCB in transferring this to a Lifetime Isa the only thing im wondering is if its worth this as ill no longer get the extra 25% bonus from the government if i were to purchase as a first time buyer.

Not sure whether you've done any research on the Lifetime ISA as you do still get a 25% bonus on the savings in it towards a first home. In fact, it's just a beefed up and in my opinion better version of the Help to Buy.

Not only can you put more in per year with no cap, 4k at anytime in the year, every year, as apposed to 200 per month, capped at a total of £12000 for the HTB, but with the Lifetime you also get the bonus paid on top each month, so you put in 4000 in March and have 5000 in April.

This matters because by using the Lifetime you can go to the bank for a mortgage with a deposit of £25'000 after 4-5 years, of which only £20'000 is your money, unlike with the HTB where you'd still only have your hands on the £12000 maximum that you'd put in to put down as a deposit, as the extra bonus is paid direct to the sellers of the home through your conveyancer and you never actually see the cash nor show it the bank.

Jonny1875 wrote: »

Thanks for your advice!
Those are definitely my two immiediate goals, i'm glad now i know to focus on adding to my Help To Buy ISA as I already have an established emergancy fund.

I think my reasoning for wanting to invest £1000 is the length of time it'll take to reach a sizeable house deposit maximising the use of the Help To Buy ISA. I cant help but feel i have an oppurtunity for something else to be running in the background given that im in a strong position of already having an emergancy fund. I can add to my Help To Buy ISA for the next year using spare money from my Instant Access ISA/ emergancy fund therefore leaving me with a spare £1k+ i could do somthing with in the meantime for my long term future and therefore I have become interested in a S&S ISA.Touch wood i should also have money coming in from employment obviousily.

Personally, as others have said, if your aim is to save for a first home, I'd focus on that to begin with, open a Lifetime and move the funds in your Help to Buy over and top it up to the £4k limit for this year while you still can. You'd have until the end of February to apply for the transfer with Skipton, after this any transfer would count towards next years 4k deposit.

By putting 4k per year into a Lifetime for 4 years and a few months (covering 5 tax years), you'd put 20k away and get a bonus of 5k and around 1k in interest. So growth of 30% or around 7% per year, guaranteed, so why bother risking your cash in a record high stock market which could turn at any point, unless you have excess over the 4k per year to put away into it.

Personally, although of course this is only my thoughts out loud, I'd convert to the Lifetime and top up to 4k this year, using the other savings you have to do so, putting the savings left over into high interest current accounts and monthly savers as others have discussed for a rainy day/emergencies/furnishing your house in the future etc.

Then going forward in future years, after putting the 4k per year into the lifetime first, I'd only then drip feed any excess savings each month into share funds unless you want to grow/regrow your savings pot further for bigger buys like a new car etc.

Just my 2 pence, but I can't see the point in jumping ahead into risky investing just yet without already maximising the safe options which off3r good returns and meet your aims (like saving for a deposit) like the lifetime and using high interest current accounts.

Joe