I have more money than I know what to do with. What would you suggest?

VNX

What a shame this very interesting thread has been ruined by childish squabbling. 

VNX

doriangray23 said:

Hello,

I'm 27 and in NW England.

I bought a house (using part of my student finance maintenance loan (21k, because household income was - and always has been - low. This is my way of saying I haven't had money from my parents)), which I haven't paid off. At present, I gain more interest having money in the bank than I would save by paying off my mortgage early.

I haven't paid off my student loan, but I'm also not earning enough to pay it (and I understand MSE lean towards not recommending paying this off except in rare circumstances).

I have almost 40k in the bank: a 12 month emergency fund, general savings, some floating in a current account, a small pot of prospective mortgage overpayments (mortgage is fixed for 10y and it's quite low, compared to many in the UK (the NW is cheaper, it's a mid-terrace, and the house needs work!) - and some set aside to pay for specific work needed on the house.

I have a job. It's enough for me to live on, with spare (because I chose a house well within my means, and I can do the necessary work gradually all whilst knowing my mortgage isn't a high one) 1/3 of my income goes on bills/mortgage. About a quarter goes into my day-to-day spending, and I've opted to put some towards doing up the house (it's a long process!). I don't always spend everything I put into the day-to-day/house account(s), but it's there. Then there's some extra left.

Have I missed something, or is it enough from a saving POV to have an emergency fund, and savings? (I pay a pension through work, but I also have several health conditions and I am loathe to put any more money into a pension when it's too soon to know whether or not I will actually reach it. I may rethink this in 15-20 years, but I'll be mortgage free by then whether I overpay or not).

So... I'm not paying off debts (mortgage, student loan), I'm not putting more into a pension, I have an emergency fund, I have savings. What else do I do?

I've lived a frugal (see also: stingy) life, at some stages out of necessity, at other stages out of fear. I'm not a risk taker, and if I look at investing... I still need an idea of what to do when any money comes in!

Should I do something wild like visit Paris (I had planned to, but Covid said no in the end and Eurostar kept my fare) without waiting for a sale on train fares? 😅 Or buy Lego (I've got my sights on a particular set, but I'm waiting until the free gift is a good one - or until they're about to retire it)? But even that's less than 1k of Big Things I'd Like To Do.

Life is short, and I'm very aware that by some sudden circumstance or other I could end up hit by a bus etc etc, so I don't want to just watch the money build up and up without doing anything with it. But equally, I don't want to spend for spending's sake.

What am I missing? What could/should I think about?

At the moment you earn more interest on saving the money than overpaying the mortgage. 

Maybe when your long mortgage fix ends that’s the time to possibly use the savings to overpay the mortgage, that’s my plan. 

It’s certainly a difficult balance between spending and enjoying money but not spending for the sake of it and holding back some money.

fuzzzzy

hallmark said:

With respect, that's not all the MSE article does. It specifically advocates a policy of not repaying the loan if you don't have to.

I agree the OP has done well so far. As I've said before repaying student debt could easily turn out to be a good move. Aside from any morality issues being shackled with debt most of your life is a position nobody should choose to be in.

Repaying the student debt would only turn out to be a good move if the OP expects to be on a very high salary in the future. If the OP gets onto a higher salary then they may have to pay the extra 9% tax over a certain threshold until the 30 years is up. During that time if their health conditions meant they had to give up work temporarily then they would have no burden of extra repayments during that time, and likely the same if they needed to reduce working hours.

I don't personally see them not repaying their student debt as a moral issue, no more than I see people overpaying into their pensions or paying into an ISA a moral issue.

Your emotive language about "being shackled with debt most of your life" is exactly what the MSE article is trying to counter.

hallmark

Hardly emotive. The word you're looking for is descriptive. Try to debate the issues without personal digs it is possible.

hallmark

fuzzzzy said:

hallmark said:

With respect, that's not all the MSE article does. It specifically advocates a policy of not repaying the loan if you don't have to.

I agree the OP has done well so far. As I've said before repaying student debt could easily turn out to be a good move. Aside from any morality issues being shackled with debt most of your life is a position nobody should choose to be in.

I don't personally see them not repaying their student debt as a moral issue, no more than I see people overpaying into their pensions or paying into an ISA a moral issue.

To what extent it is or isn't a moral issue is open to debate (and clearly we disagree which is fine). 

However that's a flawed analogy.  Somebody who utilizes an ISA to avoid paying extra tax has not taken anything from the taxpayer, anymore than somebody who simply spent their money rather than save it has. That's a quite different situation to taking a taxpayer-funded loan then avoiding repaying it even if you're able. 

boingy

hallmark said:

fuzzzzy said:

hallmark said:

With respect, that's not all the MSE article does. It specifically advocates a policy of not repaying the loan if you don't have to.

I agree the OP has done well so far. As I've said before repaying student debt could easily turn out to be a good move. Aside from any morality issues being shackled with debt most of your life is a position nobody should choose to be in.

I don't personally see them not repaying their student debt as a moral issue, no more than I see people overpaying into their pensions or paying into an ISA a moral issue.

To what extent it is or isn't a moral issue is open to debate (and clearly we disagree which is fine). 

However that's a flawed analogy.  Somebody who utilizes an ISA to avoid paying extra tax has not taken anything from the taxpayer, anymore than somebody who simply spent their money rather than save it has. That's a quite different situation to taking a taxpayer-funded loan then avoiding repaying it even if you're able. 

Maybe you should just let it go.

fuzzzzy

hallmark said:

Hardly emotive. The word you're looking for is descriptive. Try to debate the issues without personal digs it is possible.

No, that is not the word I was looking for because the OP is not "shackled" with their student debt.

hallmark

boingy said:

hallmark said:

fuzzzzy said:

hallmark said:

With respect, that's not all the MSE article does. It specifically advocates a policy of not repaying the loan if you don't have to.

I agree the OP has done well so far. As I've said before repaying student debt could easily turn out to be a good move. Aside from any morality issues being shackled with debt most of your life is a position nobody should choose to be in.

I don't personally see them not repaying their student debt as a moral issue, no more than I see people overpaying into their pensions or paying into an ISA a moral issue.

To what extent it is or isn't a moral issue is open to debate (and clearly we disagree which is fine). 

However that's a flawed analogy.  Somebody who utilizes an ISA to avoid paying extra tax has not taken anything from the taxpayer, anymore than somebody who simply spent their money rather than save it has. That's a quite different situation to taking a taxpayer-funded loan then avoiding repaying it even if you're able. 

Maybe you should just let it go.

I'm politely discussing something on a forum.  What's your problem with that exactly?

hallmark

fuzzzzy said:

hallmark said:

Hardly emotive. The word you're looking for is descriptive. Try to debate the issues without personal digs it is possible.

No, that is not the word I was looking for because the OP is not "shackled" with their student debt.

Oxford Dictionary.  Shackled: Restrained, Limited.

Perfectly reasonable word to use and describes the situation anybody with student debt is in.

fuzzzzy

hallmark said:

fuzzzzy said:

hallmark said:

With respect, that's not all the MSE article does. It specifically advocates a policy of not repaying the loan if you don't have to.

I agree the OP has done well so far. As I've said before repaying student debt could easily turn out to be a good move. Aside from any morality issues being shackled with debt most of your life is a position nobody should choose to be in.

I don't personally see them not repaying their student debt as a moral issue, no more than I see people overpaying into their pensions or paying into an ISA a moral issue.

To what extent it is or isn't a moral issue is open to debate (and clearly we disagree which is fine). 

However that's a flawed analogy.  Somebody who utilizes an ISA to avoid paying extra tax has not taken anything from the taxpayer, anymore than somebody who simply spent their money rather than save it has. That's a quite different situation to taking a taxpayer-funded loan then avoiding repaying it even if you're able. 

It's all money legally escaping the government coffers.

Even the government website contains information on not making voluntary repayments if you don't expect to repay the full balance by the end of the loan term.

https://www.gov.uk/government/news/8-things-you-should-know-about-your-student-loan--2