Starting to save

[buddy79]

We are fortunate that we have now got to the point where money is slightly less tight - our kids are 10 and 6 - and rather than clawing our way out of the red every month we have a small amount to spare (I’m talking £400 - £500 / month). We’d like to obviously build a buffer of savings but I’d also like to start putting an affordable amount aside each month for kids university or sort of future pot. I know it won’t be much but better than nothing! Any ideas of best accounts / apps / ways to do this? We use Monzo so I could just create a pot in there but wondered if there’s something better. Thanks

As they are still 10 and 6, it may be worth it to consider stock and shares ISA as the growth would probably be better than normal savings in 8-12 years.

I split mine into Cash JISA, S&S JISA (Vanguard FTSE Global index all caps) and my S&S ISA(Vanguard FTSE Global index all caps). The cash JISA and S&S JISA are obviously in my daughter's name. I have told her about her JISAs and how much in them (she's nearly 10). I regularly tell her that this fund is meant to help her when she's 18 and we will not be able to help her more if she squanders it (by then we're nearly at retirement age).

The one in my S&S ISA will be given to her as and when she needs it. We plan to keep it as a back up just in case she turns out to be irresponsible with money when she's 18 or we need more fund to help her out.

I'd start small with the kids savings whilst you build a house hold buffer. Ideally you want 3-6 months of bills in savings. Once you have that you can re-evaluate the balance of kids and household savings.
My daughter is younger than ours but we are currently putting £50 a month into her savings plus a couple of lump sums when we have assessed our savings situation. At the moment it's an account in my name as I'm getting better rates than the children accounts she's eligible for, once she's 7 there's more options and we will set her up an account then.

Also consider overpaying your mortgage this can shave years off your term.

The ISA shout is a good one but remember it does not need to be in your kids name even if that is your intent. Things change and you might need to use the money. Here is my advice for what it is worth:

1. Definitely make sure you have an 'emergency savings' pot. Not having one of these is the thing that can really cause people issues. Err on the side of caution and make sure you have enough to survive a real-shock (ie job loss) for long enough to be able to find another.
2. Once (1) done then definitely consider saving for different goals. If you want to help the kids maybe open a stocks and share isa, invest in a global equity tracker fund. The value should grow more than bank savings over that time.

Keep in mind though that part of the trick here is knowing that the money / investments are there, but sort of 'forgetting' about them. So you might want to consider different apps away from your normal everyday banking app.

For ISAs I think investengine are very cheap and will have the investments you need. For straight forward savings you might want to look at Marygold, with instant transfers and lots of nice features to help you manage your money (ie Piggy banks).

If you are working and receive UC you can get a help to save account. 4 years you can pay up to £50 a month in and they will match a further 50% into the account at the end of year 2 and 4.