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Original poster

Money just sat

20 replies

Xox0 · 15/06/2022 10:34

Ive got 8k just sat in the bank and I just dont know what to do with it. Its accumilated over the past 5 years from gifts from grandparents, tax rebate and a car crash payout. From time to time ill spend a bit for example recently brought a new bed and i brought a new sofa when we moved last year.

I never see myself in a position to buy a house. We live month to month, comftably and happily, ive just started a year maternity so will have to make some cuts to luxuries soon or take a monthly allowance out of the 8k i have sat to carry on living the life i do now. Its no big luxury life i live, i just dont ever stress or worry about money, we have about £800 spare after paying bills that we spend eating out, regular coffee/lunch dates with friends, family days out, a treat for the family, a new rug, new shoes, clothes etc. Im happy living this way and its not a big deal to me to get a morgage, im happy to rent with the thought of if anything goes wrong/breaks in the property its not my responability or for me to pay out for. We are looking to move into a bigger rental in 6 months time so our 'spare money' will be cut as well as me beeing on maternity and i may not return to work (2 under 2 i dont think going back to work will be worth it after paying childcare).

I just dont know what to do with this 8k. It just sits in my current account. We do plan on booking a holiday next year. I dont like the idea of it going into an account where i cannot access it as i like to be able to do spare of the moment days out/weekends away and be able to dip into it. Ive always been a live life in the moment person like today could be my last day on earth.

What would you do with the 8k? Just continue to let it sit? Spend it on somthing? If so what? Ive got a decent car that works well for our family and runs well with no problems, i do pay my car insurance which was £700 last year in one go, so that will be taken from the 8k in september. Christmas we have a seprate cash pot we put money into weekly throughout the year.

OP posts:
nettie434 · 15/06/2022 11:30

I think it's important to have some savings. However, with inflation at 9%, there is no savings account that will mean your savings go up in value in real terms. You could always buy some Premium Bonds. Your chances of winning would be low but then again you could be lucky. You can always cash them in so they are flexible. There are quite a few notice saving accounts where you get slightly more interest but have to give 28 days notice or so. Looking at what you use your savings for, you could keep money for shoes, days out in an easy access account and money for rugs, holidays in the notice account. I know that makes things more complicated having 2 accounts but it can help to separate savings into short term and medium term.

BIWI · 15/06/2022 11:31

Having it sitting in your current account is silly - you can earn interest on a whole range of instant access accounts. Marcus (from Goldman Sachs) is a good one to consider.

BIWI · 15/06/2022 11:33

Marcus

hoochyhag · 15/06/2022 11:34

Money saving expert has some sound advice. Just stick it somewhere where it will make a bit of interest, better than nothing, and more motivation to add to it Wink

www.moneysavingexpert.com/savings/

LAHallucinations · 15/06/2022 14:29

Is the 8K all of your savings? If I were you, I'd put a big chunk (say £7500) into premium bonds. With average luck you could win 4 x £25 each year. Could be more, could be less, but better than having it sitting in a current account doing nothing. That would be my emergency fund and I'd try not to touch it.

I'd then open an easy access savings account with somewhere like Marcus (1.3%) and I'd see if my bank had a good regular savings account. I have one with Natwest that pays 3.3% on balances up to £1000 when you pay in £1-£150 each month. You've got absolutely loads of disposable income, so if I were you I'd cut down on treats for a while and transfer £500 a month into your savings accounts.

Babyroobs · 15/06/2022 18:35

Xox0 · 15/06/2022 10:34

Ive got 8k just sat in the bank and I just dont know what to do with it. Its accumilated over the past 5 years from gifts from grandparents, tax rebate and a car crash payout. From time to time ill spend a bit for example recently brought a new bed and i brought a new sofa when we moved last year.

I never see myself in a position to buy a house. We live month to month, comftably and happily, ive just started a year maternity so will have to make some cuts to luxuries soon or take a monthly allowance out of the 8k i have sat to carry on living the life i do now. Its no big luxury life i live, i just dont ever stress or worry about money, we have about £800 spare after paying bills that we spend eating out, regular coffee/lunch dates with friends, family days out, a treat for the family, a new rug, new shoes, clothes etc. Im happy living this way and its not a big deal to me to get a morgage, im happy to rent with the thought of if anything goes wrong/breaks in the property its not my responability or for me to pay out for. We are looking to move into a bigger rental in 6 months time so our 'spare money' will be cut as well as me beeing on maternity and i may not return to work (2 under 2 i dont think going back to work will be worth it after paying childcare).

I just dont know what to do with this 8k. It just sits in my current account. We do plan on booking a holiday next year. I dont like the idea of it going into an account where i cannot access it as i like to be able to do spare of the moment days out/weekends away and be able to dip into it. Ive always been a live life in the moment person like today could be my last day on earth.

What would you do with the 8k? Just continue to let it sit? Spend it on somthing? If so what? Ive got a decent car that works well for our family and runs well with no problems, i do pay my car insurance which was £700 last year in one go, so that will be taken from the 8k in september. Christmas we have a seprate cash pot we put money into weekly throughout the year.

I'd save it for if you don't go back to work. How are you planning to manage when you are an income down?

lady725516 · 15/06/2022 19:00

I would do 5k in p.bonds and the rest in an easy access savings account

swifty1974 · 15/06/2022 23:08

hoochyhag · 15/06/2022 11:34

Money saving expert has some sound advice. Just stick it somewhere where it will make a bit of interest, better than nothing, and more motivation to add to it Wink

www.moneysavingexpert.com/savings/

Please do t stick it in a savings account as I flatiron means it'll be worth 9% less in a year's time....effectively you're losing nearly a grand a year because you're able to buy less with it....if you're feeling adventurous buy some bitcoin and watch it fly....really good time to buy as it's just gone down a lot....if not open a stocks and shares ISA and invest in a range of funds....bit safer but less likely to beat inflation and any gains are tax free.....whatever you do just don't put it in a savings account as you'll be losing a big chunk of it every year....you'll still end up with 8 grand but your 8 grand will buy you 9% less stuff because of inflation....hopefully this makes sense

swifty1974 · 15/06/2022 23:09

And sorry for the bad typing....in bed on my phone and getting a bit drowsy lol...

swifty1974 · 15/06/2022 23:11

Alternatively pay off some debt as the interest you'll be paying will be much higher than the interest it would earn sat in the bank.....just do whatever give you the most benefit from it.....and don't just stick it in the bank....did I mention don't just stick it in a bank account ...just checking....lol

HollowTalk · 15/06/2022 23:13

Bear in mind that you might be okay renting now but you will have to continue paying that rent even when you're on a pension whereas if you buy some more then your mortgage will have been paid off by then.

swifty1974 · 15/06/2022 23:14

There's some terrible advice on here....inflation will eat your money if you just save it unless you can find a savings account that will pay you more than the rate of inflation which is 9%.....I'm amazed how many people aren't getting this.....a 3.3% savings account means you're actually losing 5.7% each year.....ffs

Babyroobs · 15/06/2022 23:16

swifty1974 · 15/06/2022 23:14

There's some terrible advice on here....inflation will eat your money if you just save it unless you can find a savings account that will pay you more than the rate of inflation which is 9%.....I'm amazed how many people aren't getting this.....a 3.3% savings account means you're actually losing 5.7% each year.....ffs

So what would you recommend people do with money when there is no hope of earning any kind of decent rate of interest anywhere?

GreenLunchBox · 15/06/2022 23:21

swifty1974 · 15/06/2022 23:14

There's some terrible advice on here....inflation will eat your money if you just save it unless you can find a savings account that will pay you more than the rate of inflation which is 9%.....I'm amazed how many people aren't getting this.....a 3.3% savings account means you're actually losing 5.7% each year.....ffs

So what's your advice then?

EmmaH2022 · 15/06/2022 23:24

swifty1974 · 15/06/2022 23:14

There's some terrible advice on here....inflation will eat your money if you just save it unless you can find a savings account that will pay you more than the rate of inflation which is 9%.....I'm amazed how many people aren't getting this.....a 3.3% savings account means you're actually losing 5.7% each year.....ffs

So I should empty my savings account and put it in current?!

oP, up to you. Split between savings account and shares, possibly shares ISA? Tons of options.

swifty1974 · 15/06/2022 23:38

The only solution which means you'll not lose anything is to invest in something that give you a higher return than the rate of inflation....that's just some maths....the problem is that even the best investors in stock and shares will only generally hit 7 or 8% consistently.....probably the best option you've got is a well diversified portfolio of shares and funds in a stocks and shares ISA....then at least the return you get isn't taxed.....other than that you're pretty screwed unless you want to go for something more risky like bitcoin.....this is exactly what I've done by the way but yeah everyone's monet is losing its value because of inflation.....we still have the same number of pound but we're able to buty less stuff with each pound....no easy answer but just do something with it other than stick it in a savings or a current account....

swifty1974 · 15/06/2022 23:39

Sorry typing is getting even worse but hopefully you get the drift.....don't save....invest....

oviraptor21 · 15/06/2022 23:52

For short term savings which is what the OP needs as they want to be able to access it quickly and in any case it doesn't sound like they have the ballpark savings amount of 6 months of outgoings, stocks and shares are not a good option.

Unfortunately there isn't a lot that will keep up with inflation currently. Tracker funds get locked away for a set term.

Premium bonds are paying out at around 1% but OP doesn't have the sort of money needed to maximise their chances of making that figure.

Some easy access savings accounts and even current accounts are offering 1.5% or more, often tied in with conditions. Still far short of inflation but better than nothing. Some of them only offer the higher rates on the first £1 or £2K so several accounts might be needed to maximise returns.

swifty1974 · 16/06/2022 08:15

oviraptor21 · 15/06/2022 23:52

For short term savings which is what the OP needs as they want to be able to access it quickly and in any case it doesn't sound like they have the ballpark savings amount of 6 months of outgoings, stocks and shares are not a good option.

Unfortunately there isn't a lot that will keep up with inflation currently. Tracker funds get locked away for a set term.

Premium bonds are paying out at around 1% but OP doesn't have the sort of money needed to maximise their chances of making that figure.

Some easy access savings accounts and even current accounts are offering 1.5% or more, often tied in with conditions. Still far short of inflation but better than nothing. Some of them only offer the higher rates on the first £1 or £2K so several accounts might be needed to maximise returns.

Not sure what tracker funds you have but I sold mine and wasnt locked into anything....they are traded like shares you can sell your holding whenever you like

Winter2020 · 16/06/2022 08:48

Hi OP,
I would really think about and look into whether you are right to rule out buying property.

What area of the country do you live (is it an expensive region?)

You have maintained savings and live comfortably. That sounds promising for being able to buy. Although you are happy paying rent and not having repairs if the past is anything to go by rent goes up and up while your mortgage in time usually gets less expensive and one day finishes.

One big down side to buying is struggling to pay the mortgage if your income falls, in redundancy or as you have mentioned two sets of childcare.

Maybe keep an eye on what Boris comes up with for being allowed to use housing benefit to pay your mortgage. (In case of a change of circumstances I mean). Otherwise the right time for you might be when the kids have gone to school. Allowing a higher amount of savings in a help to buy/lifetime ISA (that can be used for house deposit) without affecting entitlements to benefits was another idea I have heard mentioned so watch out for that if you think you might want to claim help with childcare etc.

If you decide to save for property those accounts are good because they receive government bonuses. You would have to trickle the money in I think.

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