Young family with roughly 30k what to do with the money

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  • Thanks for the responses............ initially we took the extra money as my partner wanted to convert the kitchen and dining room and add a play/family room and a downstairs bathroom. I am reluctant as we have visited the property a number of times and we have both agreed that the property is in fact large enough and the doorways are larger than usual so it feels very open. Our only debt is our mortgage 200k we ended up borrowing 10k more than we needed on the mortgage and have saved another 18k which sits in a current account, we also have 7k in sky shares..

    We have overpaid our mortgage over the last 5 years so its been along time since we had savings in our accounts as we continuously put this towards reducing our mortgage and now have 250k in equity.

    My partner earns 32k and I earn 17k and we have one child and another due in December. The property we are purchasing is now our forever home and may extend in time but as we are not due to remortgage in the next 5 years and will be penalised for overpaying on our new mortgage we just were looking where to invest low risk. I say split the money into Isa and my partner believe current or savings is best.
  • xylophone
    xylophone Posts: 44,140
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    ISA rates are poor at the moment.

    http://www.thisismoney.co.uk/money/saving/article-1583864/Best-savings-rates-Isas-Cash-Isa-accounts-fixed-rate-Isas.html

    You would get a better return using current accounts - see previous post.
  • eskbanker
    eskbanker Posts: 30,418
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    LondonRose wrote: »
    We are unsure what to do with the money and where to invest it if anyone could offer some advice to get us started.
    LondonRose wrote: »
    we just were looking where to invest low risk. I say split the money into Isa and my partner believe current or savings is best.
    At the risk of being pedantic, are you using 'invest' and 'save' interchangeably? Investing is generally considered to mean putting money into stocks/shares, funds, etc, with risk of capital loss (and also potential for significant long-term growth of course!) whereas saving refers more to retaining money in cash deposit form, usually capital-protected.

    I imagine you'd be looking to stay in cash but wonder if your preference for ISAs (and the fact that you already hold some shares) means that you're considering S&S ISAs for long-term investment?
  • Alexland
    Alexland Posts: 9,653
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    Maybe the sky shares were bought through some kind of employee share scheme but it sounds risky retaining so much money in the valuation of a single company.

    My parents had 18k in AIG from employee benefits and retained them (against my advice 20 years ago) after leaving and saw them devalue to under 2k so my advice is to sell the shares as soon as you are allowed to diversify. In your situation I would keep the 7k invested in a low cost multi asset tracker fund eg the Vanguard Life Strategy range

    As it sounds like you have not moved in yet I suggest keeping the rest of the money in cash (regular savers etc most still allow easy access) and only doing urgent work on the property until you have had time to live in the home and come to a balanced view on what needs doing and when. You might regret it if you kick off projects too early before reflecting on their value.

    The early years with children are the best time to invest for their future and to take the pressure off in your later years.

    At the very least consuder putting 100 pounds each in an Orbis Access S&S Junior ISA and they will double it and run the investment without fees until they are 18.
  • Thanks all for the advice has been very useful as I did not have a clue where to start............

    The sky shares were from an employee scheme and my partner wants to wait for a buyout which he believes will happen within the next few years and then by that point we will need to replace our car so will use them funds.

    I have read through the Martin Lewis savings guide and it has made it clearer to me that Isa is not best place at the moment so will need to get opening some new accounts once the house sale has gone through which should be in the next 2 weeks.

    I am interested in investing a small amount................ where would I start as have never invested in my life.

    I am reluctant to save for kids at the moment, which may not be a wise decision. I thought once I am not paying so much childcare I intend to push money into my mortgage and hammer that down and then I will be able to save larger amounts for the children when they are older and I am not stuck with my monthly mortgage to pay.
  • I started saving for my daughter when she was quite young, £100 per month at 6%, its surprising how much she is worth now at 16! - the thing with regular saving (or investments) is the earlier you start the more the benefits and you get used to lower disposable income - even £25 per month would be a good start for the children - just a suggestion.
    I need a better signature
  • bigadaj
    bigadaj Posts: 11,531
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    LondonRose wrote: »
    Thanks all for the advice has been very useful as I did not have a clue where to start............

    The sky shares were from an employee scheme and my partner wants to wait for a buyout which he believes will happen within the next few years and then by that point we will need to replace our car so will use them funds.

    I have read through the Martin Lewis savings guide and it has made it clearer to me that Isa is not best place at the moment so will need to get opening some new accounts once the house sale has gone through which should be in the next 2 weeks.

    I am interested in investing a small amount................ where would I start as have never invested in my life.

    I am reluctant to save for kids at the moment, which may not be a wise decision. I thought once I am not paying so much childcare I intend to push money into my mortgage and hammer that down and then I will be able to save larger amounts for the children when they are older and I am not stuck with my monthly mortgage to pay.

    Sky have been subject to a rather protracted bid from fox, so the murdochs effectively buying out the remaining share holders.

    I'd say there's far more risk of losses on single company shares than huge gains but it's your choice.
  • Alexland
    Alexland Posts: 9,653
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    edited 10 September 2017 at 11:35AM
    Once you get to enough equity to have access to the best mortgage rates there isn't much point overpaying when on average across enough years a regular fund investment should generate more growth than your mortgage interest rate. Kids are expensive so the earlier you start the more the returns will compound.

    Mortgages get easier with time anyway as the repayment becomes a lower proportion of your payslip due to inflation.
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