What would you do in this situation?

ItchyScratchyShow

Hello all, 

I'm really hoping for ideas and advice.

I'm just about to pay off my final debt - my mortgage - next week and then I will be 100% debt free. In my early 20s, I got into a huge amount of debt. For the last 15 years (I'm 47) I've not really saved much, just laid everything into paying off the debt, which means I've only got about £2500 in hand which I've got in an ISA for emergencies.

Where money is concerned, wiping out debt has been a tunnel focus for me so I've not really paid much attention to savings and investments. I'm a bit overwhelmed where to start and how to get my money now working for me. To be honest, I don't really understand a lot of what I'm looking at.

What kind of savings or investment would you look into if you were me? At the moment, I have about £750 a month to put away, and would ideally like something accessible. I have an 11 year old child to also consider.

Please don't think I'm asking for 'financial advice' as such, I really would just appreciate a bit of wisdom to help me get started in what to look at.

Thank you so much in advance for any help.

El_Torro

First step is to build up an adequate emergency fund. This is typically between 3 and 6 months worth of expenses held in cash. Is £2,500 enough?

After that you can invest, typically in a Stocks and Shares ISA or pension, or both. There are advantages and disadvantages to both.

ItchyScratchyShow

El_Torro said:

First step is to build up an adequate emergency fund. This is typically between 3 and 6 months worth of expenses held in cash. Is £2,500 enough?

After that you can invest, typically in a Stocks and Shares ISA or pension, or both. There are advantages and disadvantages to both.

Thank you so much. I probably should boost up the cash I have a little first. Expenses aren't that much but 6 months breathing space would be nice.

I should have said, I'd like to set up a bit of a nest egg for my child too, if possible. Whether that's with my own savings and transferring at an appropriate age or starting something off in their name.

xylophone

I will be 100% debt free. 

Congratulations!

Use a flexible ISA to build up the emergency fund then consider options as above?

El_Torro

Junior ISAs are good for saving for kids. The main downside is that the money will be theirs at 18. Alternatively you can invest in your own S&S ISA, which means you can give them money when you choose. 

eskbanker

ItchyScratchyShow said:

What kind of savings or investment would you look into if you were me? At the moment, I have about £750 a month to put away, and would ideally like something accessible. I have an 11 year old child to also consider.

Please don't think I'm asking for 'financial advice' as such, I really would just appreciate a bit of wisdom to help me get started in what to look at.

Pensions are mentioned in an earlier post but you haven't said what your pension provision looks like - it's perfectly understandable to look at building up a pot of readily accessible savings, but beyond that, pensions are generally a very tax-efficient way of putting money aside for later life, so, depending on how you're currently set up, it might make financial sense to prioritise your future over that of your child, admirable though that may be!

Emmia

ItchyScratchyShow said:

Hello all, 

I'm really hoping for ideas and advice.

I'm just about to pay off my final debt - my mortgage - next week and then I will be 100% debt free. In my early 20s, I got into a huge amount of debt. For the last 15 years (I'm 47) I've not really saved much, just laid everything into paying off the debt, which means I've only got about £2500 in hand which I've got in an ISA for emergencies.

Where money is concerned, wiping out debt has been a tunnel focus for me so I've not really paid much attention to savings and investments. I'm a bit overwhelmed where to start and how to get my money now working for me. To be honest, I don't really understand a lot of what I'm looking at.

What kind of savings or investment would you look into if you were me? At the moment, I have about £750 a month to put away, and would ideally like something accessible. I have an 11 year old child to also consider.

Please don't think I'm asking for 'financial advice' as such, I really would just appreciate a bit of wisdom to help me get started in what to look at.

Thank you so much in advance for any help.

I'd prioritise your own financial stability over savings for your child specifically. If you save for yourself, you'll have the financial means to assist your child if they need it.

If you're aiming for 6 months income as a buffer I'd hold that in different ways, so 1/3 as instant access cash, with some of the rest in a notice account and  the remaining money in a S&S ISA or tied up in someway - if you have an event which means your instant access buffer is used, you'll have notice that you need to dip into the other buffers

Kim_13

Given the low amount of cash in hand, I would recommend Regular Savers: https://www.moneysavingexpert.com/savings/best-regular-savings-accounts/

For £750 you would be looking at 2-4 accounts and could split them off into different pots of money when they mature, investing one perhaps.

Many provide access during the term: some unlimited withdrawals, some a limited number of withdrawals and some on early closure, so you should be able to find accounts to suit your needs.

There is a more comprehensive list of the best accounts available in this thread and you can also ask any questions you might have there: https://forums.moneysavingexpert.com/discussion/6576962/the-top-regular-savers-discussion-thread/p1

Albermarle

As others have said, there is no point saving for a child if it means neglecting to make provision for your own later life.
Your child will presumably be happier to see their parent comfortable when older, rather than living hand to mouth.

Barkin

Emmia said:

ItchyScratchyShow said:

Hello all, 

I'm really hoping for ideas and advice.

I'm just about to pay off my final debt - my mortgage - next week and then I will be 100% debt free. In my early 20s, I got into a huge amount of debt. For the last 15 years (I'm 47) I've not really saved much, just laid everything into paying off the debt, which means I've only got about £2500 in hand which I've got in an ISA for emergencies.

Where money is concerned, wiping out debt has been a tunnel focus for me so I've not really paid much attention to savings and investments. I'm a bit overwhelmed where to start and how to get my money now working for me. To be honest, I don't really understand a lot of what I'm looking at.

What kind of savings or investment would you look into if you were me? At the moment, I have about £750 a month to put away, and would ideally like something accessible. I have an 11 year old child to also consider.

Please don't think I'm asking for 'financial advice' as such, I really would just appreciate a bit of wisdom to help me get started in what to look at.

Thank you so much in advance for any help.

If you're aiming for 6 months income as a buffer I'd hold that in different ways, so 1/3 as instant access cash, with some of the rest in a notice account and  the remaining money in a S&S ISA or tied up in someway 

Personally I wouldn't tie up emergency/buffer funds anywhere that I couldn't get it straight away, and definitely not in a S&S ISA where I might be forced to cash out at a loss.

allegro120

ItchyScratchyShow said:

Hello all, 

I'm really hoping for ideas and advice.

I'm just about to pay off my final debt - my mortgage - next week and then I will be 100% debt free. In my early 20s, I got into a huge amount of debt. For the last 15 years (I'm 47) I've not really saved much, just laid everything into paying off the debt, which means I've only got about £2500 in hand which I've got in an ISA for emergencies.

Where money is concerned, wiping out debt has been a tunnel focus for me so I've not really paid much attention to savings and investments. I'm a bit overwhelmed where to start and how to get my money now working for me. To be honest, I don't really understand a lot of what I'm looking at.

What kind of savings or investment would you look into if you were me? At the moment, I have about £750 a month to put away, and would ideally like something accessible. I have an 11 year old child to also consider.

Please don't think I'm asking for 'financial advice' as such, I really would just appreciate a bit of wisdom to help me get started in what to look at.

Thank you so much in advance for any help.

It was very long time ago, but I still remember the feeling when I paid off my mortgage, which was also my final debt.  Congratulations on achieving this goal.  
Re. £750 a month to put away. For maximum return you can open 3 or 4 regular saving accounts, the list is here https://forums.moneysavingexpert.com/discussion/6576962/the-top-regular-savers-discussion-thread/p1. 
Re. savings or investments. Investments involve risks - savings are protected. With savings you know what profit you are getting - with investments you don't and also have to be prepared to loose some of your money.