Saving advice for my daughter

Ceme3000

If your daughter wants to invest because she is frustrated by the low return from cash savings accounts, then it's worth chatting with her about the possibility of a future market correction reducing her investment on paper, possibly for a year or longer, and how she would feel about that.  Would she worry and stress about it? Panic and sell perhaps?   At least having a discussion about the pros (beating savings rates in the long term) and the cons will help her weigh up the risks in her own mind. Then when a market correction happens (which it inevitably will) it won't be a complete shock to her.

jeannot18

badger09 said:

jeannot18 said:

bostonerimus said:

Having money in the bank is a good thing. So I would advise your daughter to keep 6 months spending in the bank; pay off any high interest debt like credit cards; contribute to a workplace pension if she has one and when all that is done open a stocks and shares ISA or maybe a LISA - a simple and inexpensive way to go would be with Vanguard and hold something like VLS80 in it. Two other things to do are to do a budget so she can see where to save more money and to educate herself so she knows why she is buying VLS80 and what to expect.

Thank you bostonerimus, she has ~7K but wants to keep some for immediate access, hence starting with only 5k. She does not used credit card (i taught her well ;0),), she is on her work pension scheme. So yes she is on her way to do well hopefully. i will check the VLS80. I will probably order the book that xylophone recommended as I would not mind learn a few things. She is lucky somehow as she lives rent free for the time being, hence why she can save so much

Sorry, but if you've taught her not to use her credit card at all, I don't think you have taught her well.
Using a credit card responsibly to pay for things she buys anyway, and paying off the balance in full every month, is a good thing. It shows potential mortgage lenders and other service providers that she can manage her finances sensibly. 

badger09 said:

jeannot18 said:

bostonerimus said:

Having money in the bank is a good thing. So I would advise your daughter to keep 6 months spending in the bank; pay off any high interest debt like credit cards; contribute to a workplace pension if she has one and when all that is done open a stocks and shares ISA or maybe a LISA - a simple and inexpensive way to go would be with Vanguard and hold something like VLS80 in it. Two other things to do are to do a budget so she can see where to save more money and to educate herself so she knows why she is buying VLS80 and what to expect.

Thank you bostonerimus, she has ~7K but wants to keep some for immediate access, hence starting with only 5k. She does not used credit card (i taught her well ;0),), she is on her work pension scheme. So yes she is on her way to do well hopefully. i will check the VLS80. I will probably order the book that xylophone recommended as I would not mind learn a few things. She is lucky somehow as she lives rent free for the time being, hence why she can save so much

Sorry, but if you've taught her not to use her credit card at all, I don't think you have taught her well.
Using a credit card responsibly to pay for things she buys anyway, and paying off the balance in full every month, is a good thing. It shows potential mortgage lenders and other service providers that she can manage her finances sensibly. 

That's exactly what I meant (I could have been clearer), for example she uses her credit card when on holiday (Halifax Clarity) but always pay back in full before interests kicks in. What i was trying to say is that she does not run thousands of pounds on her credit card like some people i know (a friend of mine years ago had a £20K credit card maxed out!!)