Saving stategy/psychology

gascar

Personal view: It depends how much you have in savings.

If you have about 20k or more, then you will benefit if you educate yourself a bit - the nuts and bolts - and use a Stocks and Shares account.

You need to be comfortable with numbers,  which many aren't.

There are funds you can buy on a S&S platform, which behave like the building society account, growth wise. Five and a bit percent, for the last 3 years or so.

If you're prepared to learn just a bit more and keep an eye on things, monthly or so,  (phone app is fine) You can do a lot better. So instead of getting £1k on yor 20k you'd get 3k or 4k, in a year.

Things like the overall stock market index waves around so don't use those. 

As an example there's a managed bond fund which has grown nearly 80% over the last 3 years, without any nasty dips. It's called MAN Dynamic Income Class I Hedged (IH). You'd need an account at a suitable "platform". Some don't have it. Your Bank S&S is less likely to have it.  AJ Bell, Interactive Investor, Hargreaves Lansdown, all do. ( Some folk might want the Investment Grade version, with performance close behind)

.

For 20k, go to AJ Bell, which at times will give you a hello of £200. You pay 0.25% per annum in fees,= £50.

The fund is aiming for 20%pa at the moment.

So instead of getting about £1k on your 20k you'd get £4000. Something very odd would have to happen for it to be less than £1k at the moment and remember you can always sell, if there were turmoil of some sort. It hardly dipped when Trump did his thing.

More here: https://forums.moneysavingexpert.com/discussion/comment/81563350/#Comment_81563350 It's the orange line.

masonic

Probably best also to read the trailing discussion.

cockerWalker

We use short, mid, and long term savings, with agreement on rough priorities.

Short term is instant access, mid term is fixed term limited withdrawal, long term is s&s isa, hopefully not to be used until retirement.

Currently we've enough in the short and mid term savings, so savings are all routed to isa and pension.

In terms of funding specific purchases, we agree every year on priority spends. Currently we're expecting to need to replace a car at any time (so have the budget for that in the short term account) and want to get kitchen redone (mid term). 

Kim_13

I also only have pots in as far as I have multiple Regular Savers on the go. NatWest Digital Regular Saver and Melton Issue 5 will be my Emergency Fund when they are full, given that they come with an indefinite term. With the limited monthly pay in, it will help ensure that they are used only for the intended purpose as it discourages withdrawals unless you absolutely have to. Currently my Emergency Fund would be the contents of a non-flexible EA ISA, so again, don't really want to be pulling that out.

I still have the Stafford Regular Saver, opened in 2022 when it was the best rate available. As they impose postcode restrictions from time to time, I'm reluctant to close it and keep it running with £25 per month, earmarked for bigger purchases that are wants rather than needs. I intend to use this to buy an iPad Mini when it is updated with OLED in 2026/2027. 

I've had a few larger expenses over the past few years so the rest of the Regular Savers aren't really earmarked for anything except funding Regular Savers in a particular future month. My Christmas Regular Saver certainly isn't for Christmas as I refuse to spend £1,500+ interest on it.

Dobbibill

I prefer several pots along side a spreadsheet too.

This means every month I budget from income to zero as every penny is given a job. It also helps me track whether each topic/pot needs more or less each month. 
I do everything from retirement, car down to dentist, opticians and hairdresser. 

I always wanted to be in a position where nothing that happens in life would come as a surprise financially - emotionally somethings you can never prepare for like bereavement but knowing you haven't got to worry or stress about it financially is really reassuring.

hellomoneyrc

I save/invest in a few ways.

I generally believe in putting as much of my money to work as possible, so invest where I can rather than just put into savings, but do keep some more easy access which I try to keep building up too. My split is:

Nutmeg - managed stocks and shares ISA (60% of investments)
212: my stock pick ISA (10% of investmens)
Housemartin - property investment ISA (10% of investments)

I then put the remaining 10% into premium bonds and high interest easy access savers (bonus if there are also prize draws) so currently Coventry Building Society.

This is all on top of the money that I save with my partner for specific things within our joint Starling account - we have pots for holidays, car maintenance, childcare (all taken on 2nd month automatically), and a general fun fund fund  (which is a round up pot). I find the pots super useful to make sure we always have enough!

chrismevans

we have a couple of pots, but put them into Notice accounts so we don't get tempted into dipping into them all the time when things are a bit tight. Found quite a few decent interest accounts too, but one of the best was a Notice Account 180 days with 4.61% at srbs.co.uk

aroominyork

gascar said:

Personal view: It depends how much you have in savings.

If you have about 20k or more, then you will benefit if you educate yourself a bit - the nuts and bolts - and use a Stocks and Shares account.

You need to be comfortable with numbers,  which many aren't.

There are funds you can buy on a S&S platform, which behave like the building society account, growth wise. Five and a bit percent, for the last 3 years or so.

If you're prepared to learn just a bit more and keep an eye on things, monthly or so,  (phone app is fine) You can do a lot better. So instead of getting £1k on yor 20k you'd get 3k or 4k, in a year.

Things like the overall stock market index waves around so don't use those. 

As an example there's a managed bond fund which has grown nearly 80% over the last 3 years, without any nasty dips. It's called MAN Dynamic Income Class I Hedged (IH). You'd need an account at a suitable "platform". Some don't have it. Your Bank S&S is less likely to have it.  AJ Bell, Interactive Investor, Hargreaves Lansdown, all do. ( Some folk might want the Investment Grade version, with performance close behind)

.

For 20k, go to AJ Bell, which at times will give you a hello of £200. You pay 0.25% per annum in fees,= £50.

The fund is aiming for 20%pa at the moment.

So instead of getting about £1k on your 20k you'd get £4000. Something very odd would have to happen for it to be less than £1k at the moment and remember you can always sell, if there were turmoil of some sort. It hardly dipped when Trump did his thing.

More here: https://forums.moneysavingexpert.com/discussion/comment/81563350/#Comment_81563350 It's the orange line.

A quick health warning... this fund is not appropriate for short-term saving. It contains, among other things, emerging market junk bonds, which helps explain why its risk score is 5 out of 7. The investment world is full of instruments which rose in price steadily and seemingly safely... until they suddenly didn't. It is wrong to say "The fund is aiming for 20%pa at the moment", because the fund's stated objective is "to provide investors with income and capital growth over a medium to long-term period" (my italics). That's not to say it is a bad fund - I invest in it myself - but it is irrelevant for the purposes of this thread.

MEM62

I generally have one pot for bigger expenses - car replacement and holidays etc - and don't have any hesitation if I need to withdraw a substantial amount.  I do earmark amounts within that for certain purposes but it is not cast in stone.  Do also have a smaller 'slush fund' for fun expenses like days out, some new motorcycle gear and that sort of thing.  

enthusiasticsaver

waterman10 said:

I was wondering whether people have specific savings pots for a new car, holiday etc ?

I've never done that personally - i've always just saved money in one savings account and then drawn money out when I've needed it for things like that.   But I was wondering if it would be a good idea to have different pots.

For example, when my car eventually gives up the ghost and I'm looking for a another second hand one, if I had assigned a pot for this, I may be mentally more prepared to spend a bit more and get a slightly better one.  Whereas, If I'm just drawing money out of my one savings account, I may be more inclined to spend as little as i can so that I don't see a huge dent coming out of my one savings account.

I just thought it was an interesting question and wondered what other people do.

It is an interesting question and I am not sure if you are still reading but I have done several connotations over the years and still do. 

Ongoing car maintenance is in a separate savings account attached to our current account.  I did have several savings spaces but Starling stopped paying interest on current accounts so I just have one savings account attached to the current to maximise interest. 

All other savings for car replacements, holidays, home improvements and christmas go in one e saver and we withdraw as needed. The advantage of one is that even a large withdrawal does not decimate the pot and I was constantly transferring from one pot to another anyway depending on need. So  one year we would replace the car or do a large home improvement project and other years it would be a big holiday.  It also builds up quicker than several different accounts.

Our spending is not linear and just having one pot works better for us now. We have an investment portfolio as a backup. We no longer do regular savers as the limits are not usually very high so spreading £1k to £2k a month over regular savers involved opening about 6-8 different accounts and withdrawing got complicated if we needed money out. Our emergency savings are in an ISA but we rarely touch it.