My Financial Aims

Quietgirl

Hello there, I am currently looking for some advice. Having recently passed my driving test and purchased a car. I am looking at saving up incase the car needs anything doing to it. Also I want to save up for a rainy day fund. I have no debts. I have an ISA, and I am thinking of putting as much money as I can into that, I doubt I would manage to use up the allowance as my income is not that high. But I loathe the idea of putting money into to an ISA and then say taking it out to pay car tax, or insurance or whatever bill comes along. I am thinking of using a normal savings account for stuff like that and my ISA more for long term savings. BUT then I think to myself why should I pay tax on the interest when I don't have to knowing that I could never get upto £3600 anyway.

AHH Decisions Decisions Decisions!!

KiKi

Absolutely - stick it in an ISA. Barclays 6.5% with no penalty for withdrawal. You'd be mad not to do that if you're never going to put in more than £3600 in a year anyway.

Why would you choose to pay tax on it if you don't have to?!

Just remember that £3600 is the maximum amount you can put in this year, regardless of how much you withdraw.

KiKi

born_again_saver

Hi Quietgirl,

I'd suggest that you firstly draw up a budget of your income and all your expenditure, and work out how much you will have to save each month/week.

Then you could save part of this extra money towards your car maintenance fund and part towards your longer term rainy day savings. To make things simpler you may want to use an ISA for the longer term savings, and an instant access, taxable savings account for the car related and other more regular bills. You might want to split it 50/50 between the two funds, or you might want to build up a pot for your car expenses first and then start on the longer term savings once you've done that.

KiKi has correctly stated that you can put £3,600 into your ISA between now and next April, but you do need to take care with the withdrawals, as you cannot replace any money you have put in. If for example you put in £3,000 and then withdraw £1,000, you can only put in another £600, even though you'd think there was an extra £1,000 you could put back in this is not the case.

Of course if you aren't going to save anywhere near £3,600 this year and/or you won't need to withdraw very much then this may not be a problem for you. If you're still unsure what to do then let us know the amounts you are likely to be able to save and I'm sure someone will be able to help further.

Quietgirl

Thanks for the replies, at the moment I am thinking of about £100 per month which is what I was paying out on driving lessons. Although, I am also not paying £18 per week out on bus fares, and I have stopped smoking too which is about another £35 per week. So the amount at the moment is watch this space. I am thinking on maybe putting in 50/50 like you said. I was just thinking of maybe £100 per month and then the day before payday sweeping the rest over to the ISA or the YBS Internet Saver. I have only had the car about 4 weeks and I am trying to judge how much I am spending on petrol. 2 weeks ago I filled the tank up for £40 and I still have over half left.

Also I need to figure out an average cost of what MOT's, servicing and road tax would cost me on a yearly basis so I can budget for next years payments as they are all going to fall at once. Plus a bit extra for those unforseen repairs. At the moment I am paying insurance monthly, not good I know, but having just passed my test at the ripe old age of 35, its costing me £476 for the year and I did go through all the comparison sites first :T

Oh yes and I want to save up an emergency fund too LOL.

[Deleted User]

Hi

Quietgirl wrote: »

and I have stopped smoking too which is about another £35 per week.

no smoking :j , you are the wunderbabe :T , soon you won't need the car, your lungs will be so good, you will be jogging to work, therefore saving more money.

Think I saw somewhere about an ISA, where you get a card for ATM withdrawals, but maybe that would be too handy.