If you had £100 P/W to "Invest", what would you do with it?

juicyjackieb

I have been working hard for quite a few years to pay off my debts and I hope to be by September debt free (no mortgage). I have been rejigging things, canceling nonessentials, and living a good level frugal life for years now, I was 20k in debt 12 years ago with 8 CCJ's at one point. By the end of this year, I should also have a fairly small pot of savings and EF. Once I have 6 months of expenses (in approx 12 months' time) I will start to have for the first time in my life actual free money and I am excited and feel actually financially optimistic. I believe this may be that financial adulting I have heard about 

After bills and adding to my bank's savings a little each week for things like holidays (remember those?) I will have around £100 extra per week. I appreciate this isn't a lot for most people so please don't mock me too hard. I want to use that money wisely. I am so used to bouncing from one financial problem to the next I am not prepared for actually being debt-free and I want to put this little amount to work and was wondering what you would do with it?

High?! interest bank account (with poo rates) for easy access? Premium bonds? Stocks? The only decision I have come to is to maximize my pension contribution through my employer. I appreciate everything carries risk (even a pension fund!) so maybe a little of each?

I want to spend the next few months reading and researching my options but I would truly love people's thoughts on this. Thank you

Dazed_and_C0nfused

For a week in isolation no it's not a lot.

But keep to it and after a year you will have saved £5,200.

If you don't expect to need this money in the short to medium term then pension contributions are very tax efficient.  If you contribute to a relief at source scheme each £100 will become £125 in your pension fund through the basic rate tax relief that gets added.

If your employer offers salary sacrifice then that is usually even more tax efficient.

colsten

To answer the question whether you should put more money into your pension(s): Imagine you are 70 (/80 /90 etc) and have stopped working. How much money will you need then, and where will it come from? 

enthusiasticsaver

I would look at your pension first and maximise that so that is a great idea.  Stocks and shares isa? Presumably you have a decent emergency fund? 

steampowered

Congratulations on being debt free! A good way to approach this might be something like the following:

- Building up an emergency fund. Make sure this is in a separate savings account which is difficult to access, so that it is truly only available for emergencies.
- Then, start saving £50 pw into a savings account. That account is available for luxuries (e.g. holidays).
- Save the remaining £50 pw into a stocks & shares ISA through a diversified investment fund. That account is for longer term savings as it will perform far better than a cash savings account - such as major expenses in future or potentially as a pot for retirement.

Whatever you do, it is important to be consistent. 

Jami74

I am certainly no expert, and also have very little money compared to others on this forum so what I've done is probably 'wrong'. However, last month I opened my first S&S ISA with Vanguard and invested in a Lifestrategy fund which I'm not planning to 'need' for at least ten years. I made the initial £500 deposit and am planning to add £100 a month. The value of it goes up and down on a daily basis, it's quite fun to watch.

jimpwarsop

£5k pa ? Hmm.

You're 42, you have lost all your excess weight and cleared all your debt. Well done you.

Year one use that money to have a damn good holiday as soon as the post Covid price rise ends.

You're working and paying into a pension, are you buying a property ? If so you got the bases covered, go have some fun, you deserve it.

The next twenty years will fly by, when you're in your sixties you want to be looking back on a happy life full of exciting times, not looking at a pile of cash.  If you can do both , great, if you can only do one, buy the memories.

Albermarle

steampowered said:

Congratulations on being debt free! A good way to approach this might be something like the following:

- Building up an emergency fund. Make sure this is in a separate savings account which is difficult to access, so that it is truly only available for emergencies.
- Then, start saving £50 pw into a savings account. That account is available for luxuries (e.g. holidays).
- Save the remaining £50 pw into a stocks & shares ISA through a diversified investment fund. That account is for longer term savings as it will perform far better than a cash savings account - such as major expenses in future or potentially as a pot for retirement.

Whatever you do, it is important to be consistent. 

Agree with the first two but would think an extra £50pw in the pension would be better than a S&S ISA.
OP - you do not say your age . If you look into your current workplace pension , you should have some choice of how your money is invested . The younger you are the more risk you can take in your investments , which will hopefully lead to more growth.
If you do not understand what is on offer , feel free to come back and ask more questions,

DireEmblem

Congratulations, and well done on your efforts.  It sounds like you are becoming a master of your own budgeting.

Similar to what others have said, break down your spending - try and spread any one off annual/irregular costs over the course of the year by saving up for them weekly/monthly, depending on how regularly you get paid.

These are the savings pots I have:

Spending Pots

• Annual Flat Insurance / Building Maintenance Fund
• Birthday/Christmas Present Fund
• Holidays Fund
• Treat Fund

Savings Pots

• Emergency Fund(I revisit and top this up every year - 6 months savings)
• S&S ISA

I also utilise two main bank accounts, one to collect my pay and pay out all my bills, and a second spending account.  I have a regular weekly payment into my spending account to cover day to day spending.  At the end of the week, I trickle any spare funds into the above pots.

You may already have your own version of this.

For your £100 a month into investing - if you go with Stocks and Shares, make sure you are happy to leave the funds sitting there for a while.  The investments can go up/down over time, and the longer you invest, the more likely you are to be in profit.

You want to look initially at new signup offers.  MSE had an offer recently for wealthify.  Unfortunately that offer is fully subscribed, but it was something like receive £40 cash back for investing £400 for 6 months.  I am not saying Wealthify is the best platform long term as it carries higher fees much like Nutmeg, but that £40 would have been a good head start.

Quidco have a deal at the moment, £60 cash back if you invest £100 a month, and it typically pays out in about 11 months.
https://www.quidco.com/nutmeg-stocks-shares-isa/?ucb=46e9aa744a738f500d6b2d8d4e7c4a60

So in effect invest £1200 over 12 months, and receive an extra £60 or 5% on top of your returns.

At which point, then look to switch your funds to another low cost provider, or a provider that has a similar bonus scheme.  Nutmeg will ask you what your risk appetite is, and pick investments for you.

Robinhoody

£100 week I’d try to buy a couple of ounces of silver bullion every week if I could find someone who was willing to sell

test it as soon as you get it with a magnetic slide to make sure it’s pure silver

kinger101

jimpwarsop said:

£5k pa ? Hmm.

You're 42, you have lost all your excess weight and cleared all your debt. Well done you.

Year one use that money to have a damn good holiday as soon as the post Covid price rise ends.

You're working and paying into a pension, are you buying a property ? If so you got the bases covered, go have some fun, you deserve it.

The next twenty years will fly by, when you're in your sixties you want to be looking back on a happy life full of exciting times, not looking at a pile of cash.  If you can do both , great, if you can only do one, buy the memories.

OP has had a history of debt problems, and has done an amazing job of turning things around.  They've come on here asking about advice re. savings.  Not what to spend it on. Time does have a habit of flying by, so it's nice to reach your sixties knowing you can be in a position to comfortably retire.