Extra cash not needed for day to day..

morg007

I stopped a regular monthly payment that has freed up a small amount of cash per month (£78.00). I am married, 39 (my wife is 32), with a 5 year old boy. We brought our first house with a help to buy scheme using the equity loan option Dec 2017. We have some inheritance from my Gran that was used for the house deposit and to pay off a loan and the rest of it is in a Marcus account at present - this will be used as an emergency fund/short term savings (holidays etc) which we will topped up monthly with any left over cash each month and I also want to invest some of it (still trying to decide a platform and fund etc). We have zero debt apart from the mortgage/equity loan and my student loan repayments and monthly credit card bills which are paid in full each month (its an AMEX cashback we use for food/petrol etc). We also put £300 per month into a RBS cautious growth stocks & shares ISA. Finally, I contribute 6% of my salary to the work pension with my employer doing their side and my wife is on the minimum contribution but she works 30 hrs per week nights at a care home (I'm FT). We also try and budget based on a 5 weekend month so we're not caught short for those odd months where we need to do 5 weekly food shops etc

So, having listed everything I think is relevant I'm after advice on what to do with this extra £78 as I'm used to not needing it so want to carry that on. Our goal is to not need to use our overdraft and to not get into debt and to save both short term and long term. So I see my option as follows;

1-increase my pension contribution. I could get quite close to my max contribution with this option.
2-just use it as the top up the emergency fund/short terms savings account
3-Increase the stocks and shares ISA monthly contribution
4-start a Lifetime ISA in either my name or my wife's name and have a nice nest egg at 60
5-some kind of savings/investment for my son so he has a bit of money to use at Uni/first car etc
6-Our mortgage was for 2 years so when we look to get a new deal I could use the extra funds to pay more per month to get it paid off slightly quicker
7-start repaying our equity loan off (still got nearly 4 years until the interest kicks in)
8-any other options I haven't thought about?

Thanks!

MallyGirl

you don't say what you earn but if you are not getting the maximum contribution from your employer into your pension then that is what I would address. You are losing free money there.

morg007

I earn just over 26K and my employer gives us the max contribution they have to legally (although they are talking about going to 5%). I changed my own contribution to 6% at the end of last year from 3% as the difference was approx my salary increase and I again didn't need the extra.

MallyGirl

It really depends on your goals then - I am 51 and would like to retire by 60. As a result of paying single figure percentages into my pensions over the years (always enough to get max employer contribution but not more) I am now in a massive catchup paying 45% in. I wish I had contributed a bit more over the years rather than the way I am having to do it now.
Your goals may be different but I would look closely that anything that gives you extra money/tax relief/bonus like pension, LISA.
I would also wonder if the RBS cautious S&S ISA is the best choice - with 20+ years till retirement this could be a bit more aggressive plus the charges for investing through a bank are often high

xylophone

Does your son have a JISA?

https://www.gov.uk/junior-individual-savings-accounts

https://www.thisismoney.co.uk/money/saving/article-1583863/Best-savings-rates-Junior-Isas-children-s-accounts.html

https://moneytothemasses.com/quick-savings/parents/best-junior-stocks-and-shares-isa

Joe_Bloggs

Maximize your opportunities to add to your CV with your existing employer. Take courses on offer such as first aid and similar that add to your value as an employee and show to others that you are not a mere minion trapped in servitude.
Invest in yourself !
J_B.