Is this a wise spread of savings/investments

[IlFaitBeau]

We are lucky enough to have 6 months expenses stashed away if horror strikes, and both work FT and have two smalls with peak nursery/childcare fees. Joint household income is £120k and we live in a fairly pricey area/mortgage etc. after lurking on here a fair bit I did a scout of my savings and have worked out that it appears to be spread across a few different areas.

Wondering if financially wise mumsnetters can advice whether - if the overall amount cannot go up anymore - this spread of things can or should be tweaked?

We are both total misers and won’t spend on haircuts, new clothes or anything else really and I am a genius with the famous Mumsnet chicken etc :)

(FYI the goal - if everyone stays well and no jobs lost - is to upsize in 5 years so obviously trying to get as much money for higher end deposit as possible)

I’ve looked through savings are currently appear to be doing this monthly -

NSI Premium bonds - £200 (because I like the win possibility)

Vanguard LifeStrategy 80 - £75 (bcos don’t want to take high risks with more than this amount)

Employer pension (£536 a month and employer pays twice that to Match)

Mortgage overpayment on 3.5% interest Part 2 of multi part mortgage: £250 a month

Kids Junior Stocks and Shares ISA: £50

Cryptocurrency thingy on the side £20 a month on Coinbase that buys a combo of crypto.

We are lucky for me to afford this and we can’t increase the overall. But should I spread this out a different way given goals? I should note I’m not knwoledgewbale about stocks and shares and wouldn’t dream of thinking myself savvy or capable of making complex decisions on investments….

And I fully realise how lucky we are to be able to save at all and how randomly things could change if there’s a critical illness etc.

Thanks for any help.

Not sure about the savings but your mortgage is 2.5x the interest rate mine is on. Could you switch without penalty?

With the lifestrategy - I’m assuming you’re investing for the longer term yes? Not just the 5 years?

With a mortgage rate that high i would be switching £200 from PBS to attack the overpayment ASAP. The chances of winning are just minuscule & this way you’d reach your goal quicker. Check out the odds on MSE….

Thanks! So the mortgage has two parts. The vast majority is part 1 on 1.8% and the other part is part 2 on 3.8 fixed for another year. That’s the part (part 2) we are overpaying.

One possibility is - for the remainder of the term on part 2 - to switch the premium bonds £200 into further mortgage overpayments which is I think what you are suggesting? Breaking the term for part 2 involves a penalty for about £1500.

Part 2 fixed on 3.5% till August 2023 - I meant to say.

@IlFaitBeaul, personally I’d take all but one months salary from the PBS and put it into the whopper mortgage - SO LONG AS ITS NOT £ PUNITIVE to do so.

I’d also consider whether stashing your 1 months salary into a high interest account might give you a better return? S/a a building society account or even Marcus 0.7% account unless you can get more cash elsewhere.

If you’re really serious you could do some bank account switching for £, and use a cashback credit card for purchases (whilst paying it off every month) and put the £ gained into savings… every little helps.

With that income & the desire for the big house I’d be looking to trim outgoings whilst giving yourselves a cushion for steep cost of living rises that are on their way.

Not an expert but HTH

All makes sense and we have done a massive trim of outgoing to discover how much we could save that was being wittered away on this or that. I did so much work last month on studying joint account and sole accounts and trimmed away so much that added up and we've done mega overhaul of even "small" things like meal planning etc that it's actually generated stuff to put away that we wouldnt otherwise have noticed!

Sorry to crash, I have no advice to offer but wondered how are you finding vanguard? Is it a stocks and shares ISA

Re premium bonds… currently winnings bucket calculated at equivalent of 1% interest if AVERAGE luck
Not great.
Also the more you have in premium bonds the higher your chances of winning.
Every £ you have is a single chance of winning. £200 gives you a 200 chance in circa 58 BILLION. kid you not! I have £40k invested…so I have 40,000 chances in 58 billion….
Ask yourself if for those odds you’re better off sticking it in a 1% easy access account, or whacking into mortgage or pension (where government guarantees you an extra £20if you pay directly from income source)

Sorry if I missed it but where is your 6 month stash?

Yeah, that seems a LOT to be putting in premium bonds. It's more or less like playing the lottery...whereas you could be putting more into paying off your mortgage unless your terms restrict you (you don't say what you still owe on part 2). With interest rates going up as they are some people could be in for a shock when their fixed rate comes to an end.

@IlFaitBeau

Put your 6 months emergency fund in Premium bonds. You might get a win there. If you are still desperate for a flutter, play the lottery. Do not add anything else to premium bonds. You will be losing against inflation.

Then think about strategy. With a view to upsizing in a few years, overpaying is a good idea to build equity. But it is very inflexible. You already put £250 here.

So I would probably redirect your £200 to S&S ISAs. If you are eligible (under 40), consider a LISA, which you could treat as an additional pension. You will get 25% added by government but no tax to pay on withdrawal. It is inaccessible until 60 though. Maybe allocate £50 pm to a LISA. Then put the rest in an ISA. It can pay for moving costs, furniture, making the new house the way you like it. Or added to your equity when you buy your new house. Or it could be to cover uni fees. Or your kid's wedding.

You'd benefit from creating a bit more of a financial forward plan. Meaningful Money (podcast/website/youtube) is good on this.

I think 200 anyway on on is far too high!