How and where do I start

[poppypopsiclelady]

Hello! NC for this as would otherwise be outing. I'd be very grateful for help on learning how to invest.

I'm 39yrs old, married with a DC. I'm not from the uk, moved here 6 years ago. I don't know what to do with my money, and need help. I've tried reading online and am ashamed to say I'm too stupid to really understand. For context my parents weren't well off and struggled with money so I have issues with money, am always anxious that I'll go back to being poor. I grew up watching my dad steal my mum's jewelry to pawn, even stealing money from my piggy bank. So I'm always worried about money.

I'm trying to figure out how much I should save and invest and how I can go about investing and growing my money.

My finances are as follows:
My income w/o bonus 98k (with takes it to 120k). Excluding bonus I take back around 5200 per month.

DH is at 45k, with bonus takes it to 50k. He takes home about 2600 per month.
Mortgage £1200
DC3 in Private school we each pay £250 per month, this will be £500 each per month when she starts reception.
Car total £450
Various other bills circa £1200 combined.

We split all expenses equally, we try to at least but I do end up footing the bill for anything extra/emergencies that comes up since I'm the higher income earner.

I try to save at least £1200 a month with £200 going to an ISA with HSBC. What else can I do, how else can I grow my money?
I feel so stupid and lost. Do I need to speak to a financial advisor? Some websites say yes some say no, you'll end up paying a fee and wasting money.

I'd be very grateful for advice or ideas. Pls be kind!

First, you’re definitely not stupid, especially if you command a 98k salary. This stuff isn’t taught and it should be. You don’t need an IFA. I’d recommend something like the Rebel Finance School, they do an annual video course, the next one is in May I believe.
Basically the steps are to-

• understand your incomings and outgoings so you know your gap,
• establish an emergency fund (3-6 months of expenses),
• pay off expensive debt,
• start to invest the gap between income and outgoings either in pensions or ISAs depending on your long term goals. Invest ideally in low cost, broad based passive index funds such as those offered by Vanguard.

take it step-by-step and it’ll become much clearer. Also important for you and your DH to do this together will full transparency.

Also, each couple is different but when there has been a disparity between our incomes, we split bills in proportion to relative take home, rather than split bills 50/50.

Last point, one of the RFS videos covers your mindset around money, and will help you reflect on the attitudes to money you have based on your parents history.

@Medee thank you so much. This is very kind of you. I don't have any debt - don't use a credit card (my dad got into bad credit card debt when I was young, scared me off).
Car and mortgage are our outstanding.

I will take your advice and sign up with RFS.
Once again, thank you. Much appreciated.

Agree with @Medee.

Rainy day fund, then optimize pension contribution, then lifetime
ISA (need to open before you hit 40), then stocks and shares ISA. if/when you exceed contribution limit for all the tax free savings options, an investment account which will typically generate about 4.5% above cash return.

Also overpay bit on mortgage each year if you aren’t on a low interest rate.

But an IFA will be able to advise you based on your goals and circumstances. The
above is what I do based on mine.

@Goldenhandcuffs Thank you. I have something called a GIC ISA with HSBC. Is that different from a Lifetime ISA, I believe it is? Based on MoneySavingExpert money box app is a good way to open a LISA? So that's different from an ISA in a bank?

it probably is different if it isn’t literally called a lifetime ISA or LISA. Mine is with Skipton. Contributions are capped at 4k per year but then it gives you 1k per year (so 4k turns into 5 instantly as if by magic every year :D) and then it pays 3.something percent interest as well annually. It can only be used to buy a first home or for retirement so the funds are locked away. I’m using for retirement savings.

When you're thinking about investing its important to consider which wrapper (ISA, LISA, pension), which provider (what fees do they charge) and which fund (what's it invested in, and where and what are the fund charges).

As you are higher rate tax payer, it will probably be more efficient to save for retirement via pension contributions than a LISA - you get all your tax back for pension contributions and only 20% for LISA.

Money saving expert website is generally a mine of useful info and the forums there can be quite good if you have specific questions.

I don’t think you say what savings you have already. Also, what do you want to save for?

I would probably prioritise saving a few months worth of expenses in a high interest savings account in case of job loss or boiler breaking or whatever. Then overpay mortgage and/or put money into pension.

Pps have given good advice. My goals in a similar situation are:

1. salary sacrifice pension contributions (especially once your earnings are in the 100-120k bracket) and to get the max employer contribution if applicable
2. save 3-6 months of expenses into an easy access account (I’ve got 6 months split across a cash savings account and premium bonds - am an additional rate tax payer - PB “wins” are tax free whereas I pay tax on all interest)
3. save remainder into S&S ISA invested in a tracker fund, ideally via monthly contributions as this smooths gains and losses
4. youve got a £20k/year ISA limit and also a £9k junior isa limit - I also save monthly for my kids though they will be able to access the money at 18 so not everyone wants to do this.
5. if I get to the point where I’ve maxed out all of the above I might transfer some to DH’s ISA limit and/or see whether it’s better to find a fixed rate savings account or overpay the mortgage.

That’s a great point @ParentsTrapped I had missed. OP with your bonus you’re in an awkward place personal allowance wise, so good idea to salary sacrifice enough into your pension to get income under £100k.