Please help a total novice - what should I be doing with my savings?

[Sway19]

Hi all,

Please help a girl out.

I’m in the fortunate position of having not long returned to work from mat leave and I still have a pot of savings.

I have no idea whatsoever what to do with my money. I’d really look to begin investing just small amounts here and there but I have no idea whatsoever where to start.

I don’t even know what I’m asking for really - I just know that my money is sitting there when it could potentially be growing.

Any advice?

Thanks

It all depends how much you have and how large your fixed expenses are etc. Plus how much you are paying into pwnsion. You should have some cash on hand and accessible for unexpected expenses, job loss etc. Ideally at least 3 months' salary. Beyond that it depends what your longer term plans are. Cash ISA if you might want or need to use the money in the next 5 years to get best interest rate. Stocks and shares ISA if you are saving for the long (5+ years) term.

Pay off your mortgage. Makes a difference. Unless you want to access it.

@Respectabitch I have a workplace pension as well as a private one so I’m fairly well covered in that aspect. I just wouldn’t know where to start with stocks and shares

@ZenNudist we do overpay slightly on our mortgage but yes I’d prefer to be able to access my money

As pp said, it does depend how much you are talking about, but interest rates are pathetic at the moment.
Martin Lewis's page is where I always start looking.
He finds accounts I wouldn't otherwise know about.

Stocks & shares ISA as long as you’re happy to keep it there long term as it can go down as well as up. Keep a separate emergency pot for things like a new boiler, so you don’t need to withdraw from the ISA. Look at Vanguard for S&S ISAs.

if you have any loans or credit cards, pay these off first.

Only ever invest in stocks and shares if t is money you could afford to lose. Research is key for investing. They do go up and they do go down but generally tend to outperform savings. Martin Lewis is a good place to start or you can try www.which.co.uk/money/investing for a good overview.

Good luck!

Either you have money easily accessible but earning below inflation interest or you tie it up and paying off your mortgage is probably the lowest risk for best return.
In the past I've gone for a friendly society bond that's allowed me to invest a small amount at a decent return. For most people ISAs aren't that useful because most of us won't get near the savings interest threshold that ISA protects you from.

I've also sunk some money into Nationwide's lottery style savings account, similar to premium bonds it pools everyone's interest and you have a chance of 'winning' a few thousand or getting nothing, seemed worth a punt.

I've got several months expenses readily available, which has been useful recently for covering shortfalls while dh has been earning significantly less due to pandemic and emergency laptop purchase when schools closed. In times like these a rainy day fund is really important.

I didn't have any savings until recently and having been in serious debt in the past I'm quite risk adverse.

In the last two years I've managed to save a small nest egg in a stocks and shares ISA thru Vanguard.

When I looked into it thru had the lowest fees. They offer ISA's with different levels of risk.

I have £500 a month that is debited from my bank account on the 1st of each month. I then move chunks across as I have it.

It's very easy to see my account online. Very easy to move money in and out. Just before Christmas I moved the whole of my stocks and shares ISA into the cash ISA to see what happened due to Covid and brexit. It's one click of a button.

I overpay on our mortgage slightly but I want to build a pot that will either support my children at university (living expenses not fees) and / or pay the rest of the mortgage off.

It's also really comforting that we have 6 months of salary in easily accessible savings if one of us loses our job.

Premium bonds are safe as houses and you can access your money quickly. There'a obviously no guarantee of a win but you never know. We have £2k worth and won £25 last year so that's over 1% - better than most instant access savings accounts.

Another one recommending Vanguard. As long as you already have an emergency fund saved, I would put your savings in a stocks and shares ISA as long as you’re happy to tie the money up for a while. Look at Vanguard’s Lifestrategy funds - 80-100% are higher risk but better rewards long term (e.g. 15 years +)

Enough in cash, premium bonds and cash ISAs to fund your expenses for a year if you lost your job.

Then max your ISA allowance - I like trackers because of the low management fees.

Then buy shares on your own account using something like HSBC Investdirect. Invest in companies you know, whose products you or perhaps your employer buy, and who have regular positive coverage in the financial pages of the newspapers. Hold off selling unless you really think you’ve bought a dead loss.

Take out a safety deposit box at the bank and buy a gold coin for it every new moon (via a company like Cookson Gold). DH is Indian and it’s a cultural thing. Up and down but way less volatile than Bitcoin and other crypto currencies.

Gold isn’t a crypto currency of course. It’s the ultimate currency in many cultures .