Confused with what to do with my money

BMTH

I'm 32 and not sure if I'm doing my finances right!

I have shares I have bought with my company at a discounted price which I can sell at any time now, currently worth £10k. I also have ongoing schemes (which I can't yet sell) , I set rolling ones up so it matures every year and I can either buy or sell. But I have maxed this out and it comes out of my wages at £500 every month. I can expect them to mature at around £5k+ if I decide to sell them straight away.

I have £2k in a monzo savings account which is earning something like 3.9% , I kind of consider this my emergency fund and dip in now and then but usually top it back up to £2k. I worked out my true emergency fund (based on 3+ months wages) should be around £3.5k.

I have recently started putting £100 p/m into stocks&shares which I plan on leaving for years and years, and hopefully let it mature over time and the plan be don't touch it.

I'm left with £400+ disposable every month after all essential bills. (This doesn't include going out, clothes, takeaways, birthdays).

My achilles heel is defintely £240 on car finance. Thankfully it's 0% APR but the £15K balloon payment has me questioning what to do. It's due June 2026 and basically wondering whether to blow my shares on buying the car and keeping it, then saving £240 a month with pretty much no savings ... or paying the balloon then selling the car (if its worth more) and buying something a bit cheaper.

I've had a mortgage with my partner since 2022 so barely paid anything off yet. I've plans to make renovations to the house like a new driveway but now I'm thinking if my money is better off elsewhere like paying the car off or enjoying a holiday. I'm also mixed about this house so not sure if I'd want to move again in a few years.

Zanderman

My immediate thought is why haven't you mentioned your pension?

Relying on company pension? Is it a good deal?  Are you paying the minimum in?  Or more?  If not why not?

And do you have other pensions?  Have you considered getting additional pensions.?

At 32 you should be definitely be thinking about pensions! 

boingy

My immediate thought is don't spend so much on cars! You are clearly worrying about that 15K balloon payment.

But, yeah, pension.

Newbie_John

..and salary, or at least tax bracket?
And maybe what's the goal?

BMTH

Zanderman said:

My immediate thought is why haven't you mentioned your pension?

Relying on company pension? Is it a good deal?  Are you paying the minimum in?  Or more?  If not why not?

And do you have other pensions?  Have you considered getting additional pensions.?

At 32 you should be definitely be thinking about pensions! 

Sorry forgot to put details..

Company pension scheme doubles what I put in (up to 15%) so I'm putting the max in to benefit from this which is 7.5%. (22.5% total).

Haven't considered getting further pensions.

BMTH

Newbie_John said:

..and salary, or at least tax bracket?
And maybe what's the goal?

£37K. I guess I have 2 goals.  Eventually move into my forever home and secondly retire by 55. Short term I just don't know what to do with my current shares and what to do when the car payment comes around.

Zanderman

BMTH said:

Newbie_John said:

..and salary, or at least tax bracket?
And maybe what's the goal?

£37K. I guess I have 2 goals.  Eventually move into my forever home and secondly retire by 55. Short term I just don't know what to do with my current shares and what to do when the car payment comes around.

Re retiring at 55, and going back to pensions, I would suggest that, despite maxing your workplace pension contributions, you should open a second pension and pay in to that monthly too.

If you can afford 500 in company shares each month, and also have 400 disposable each month, you can afford to put more into pensions. You don't get another chance at this.

And remember the normal retirement age, for most pensions, is changing from 55 to 57 from 2028 (and might change more in future) so you may have to adjust that retire at 55 aim.

BMTH

Zanderman said:

BMTH said:

Newbie_John said:

..and salary, or at least tax bracket?
And maybe what's the goal?

£37K. I guess I have 2 goals.  Eventually move into my forever home and secondly retire by 55. Short term I just don't know what to do with my current shares and what to do when the car payment comes around.

Re retiring at 55, and going back to pensions, I would suggest that, despite maxing your workplace pension contributions, you should open a second pension and pay in to that monthly too.

If you can afford 500 in company shares each month, and also have 400 disposable each month, you can afford to put more into pensions. You don't get another chance at this.

And remember the normal retirement age, for most pensions, is changing from 55 to 57 from 2028 (and might change more in future) so you may have to adjust that retire at 55 aim.

Can't i just add a little extra into my current pension?

Or could I add a little bit more into S&P500 and consider that a second pension?

Middle_of_the_Road

BMTH said:

Zanderman said:

BMTH said:

Newbie_John said:

..and salary, or at least tax bracket?
And maybe what's the goal?

£37K. I guess I have 2 goals.  Eventually move into my forever home and secondly retire by 55. Short term I just don't know what to do with my current shares and what to do when the car payment comes around.

Re retiring at 55, and going back to pensions, I would suggest that, despite maxing your workplace pension contributions, you should open a second pension and pay in to that monthly too.

If you can afford 500 in company shares each month, and also have 400 disposable each month, you can afford to put more into pensions. You don't get another chance at this.

And remember the normal retirement age, for most pensions, is changing from 55 to 57 from 2028 (and might change more in future) so you may have to adjust that retire at 55 aim.

Can't i just add a little extra into my current pension?

Or could I add a little bit more into S&P500 and consider that a second pension?

You could, but it would not be a pension.
It would also not add a free £10 to the pot for every £40 you deposited. That's a grand for every 4k you put into a pension. Like turning down free money?

https://www.moneyboxapp.com/pension

eskbanker

Middle_of_the_Road said:

BMTH said:

Can't i just add a little extra into my current pension?

Or could I add a little bit more into S&P500 and consider that a second pension?

You could, but it would not be a pension.
It would also not add a free £10 to the pot for every £40 you deposited. That's a grand for every 4k you put into a pension. Like turning down free money?

https://www.moneyboxapp.com/pension

When comparing pension with ISA, the tax on the way out of the pension should be factored in too, rather than giving the impression that it's a 25% variance!

OP - the S&P500 has been a good performer in recent years, but it would be a gamble to assume that this continues indefinitely, so diversifying across multiple markets would normally be considered best practice when investing.

Zanderman

BMTH said:

Zanderman said:

BMTH said:

Newbie_John said:

..and salary, or at least tax bracket?
And maybe what's the goal?

£37K. I guess I have 2 goals.  Eventually move into my forever home and secondly retire by 55. Short term I just don't know what to do with my current shares and what to do when the car payment comes around.

Re retiring at 55, and going back to pensions, I would suggest that, despite maxing your workplace pension contributions, you should open a second pension and pay in to that monthly too.

If you can afford 500 in company shares each month, and also have 400 disposable each month, you can afford to put more into pensions. You don't get another chance at this.

And remember the normal retirement age, for most pensions, is changing from 55 to 57 from 2028 (and might change more in future) so you may have to adjust that retire at 55 aim.

Can't i just add a little extra into my current pension?

Or could I add a little bit more into S&P500 and consider that a second pension?

You could add more to your existing pension, if allowed, but if you're at the employer match limit there may, depending on how it is set up, be no advantage over adding to a different pension.

And you can control another pension. Pay in as and when you want to, pause if you want to, change investments etc (again, depending on how it's set up). And it's always good to have your eggs in more than one basket.  (on that note by the way you do seem quite glued to your own firm's shares and one fund and you should perhaps diversify...) 

You could also add more to S&P500 but, as already pointed out, that's not tax-efficient.  A pension increases by 25% for your tax band and the whole is invested. S&P500 only invests exactly what you put in. 

Yes, a pension is taxed when in use, but you're not going to use it for 20 plus years, so the more you put in now (which will be more 25% than S&P500 outside a pension) the more you'll get back, even with taxation.  A pension, spread across investments and with tax refunded from the start, is a much better bet.