How to spend disposable income?

[Renovatingourhome]

Really looking for some advice please. I have worked really hard to get to where I am today and I'm really proud of myself. I had a hard childhood, we were very poor. I'm at a stage in my life now where I have £1200 leftover after mortgage, all bills, food, petrol etc and I want to spend my money wisely. I have small savings pot as we're renovating and everything we save, we seem to spend on the house but we're almost finished so ultimately each month from now my emergency funds will be going up. I'm thinking of spreading £1000 five ways - emergency savings, SIPP (self employed), LISA, S&S ISA and overpaying the mortgage. So, that's £200 per month to those five places leaving £200 a month for treats. We have 28 years left on the house. I'm almost 40 with two secondary school DDs.

....and just squander the rest.

Unbelievable that people have to ask random folk on Mumsnet how to spend their money...tone deaf? Humble brag? Give your head a wobble!

Consider a large 1960s car with an automatic gearbox.

Probably not for much longer!

OP I’d start collecting china thimbles. Get shelving to display it all.

Wine, food, hunky, hot youg men and entertainment. Then just waste the rest.

Enjoy.

But how will you pay for all the other necessities that you haven’t listed in your OP? Like clothes and school uniforms, Christmas? Haircuts?

Are you actually asking the best way to invest £1000?

Leaving £200 disposable income!? Who pays the above ?

I would over pay the mortgage as much as possible.

I think if you have no pension and a mortgage until you are nearly 70, you don't really have disposable income.

I'd save up for a good few months, then keep some accessible for emergencies, some for a bit of fun, then spend the rest on getting a decent pension and being mortgage free younger than that.

Theatre, gigs, handbags, weekend breaks, spa days.

I'm lucky to have lots of disposable income, I probably spend £200 a week, on average. Went to the theatre yesterday, £22 ticket, £25 lunch, £30 train, £5 cup of tea after theatre, £4.30 parking, something for petrol. Quickly adds up.

Id have a 1 year emergency fund then I'd slam the rest off the mortgage

She’s asking how best to invest her money for the future , asking people questions is what MN is about . It’s not tone deaf at all , I’m guessing your someone who lives on £2.48 a week . Jealous .

I'd over pay your mortgage payments & add more to your pension pot each month. It'll make life so much easier for you later on when you can't work as much & you'll be able to benefit from the saved money that you would have been spending on your mortgage coz hopefully you'll have paid it off much earlier.

More on overpaying the mortgage

The OP is 40 with 28 years left on their mortgage and virtually no pension pot. That's not a place many people would want to be in at that age. How is it a humble brag exactly?

You really need to boost your pension OP.
What are you going to live on when you retire?

My inclination would be to use at least some of it to pay extra off your mortgage every month. Say a quarter for that, a quarter into your pension, a quarter into some long-term savings plan and a quarter to fritter away spend.

We had years of being on low income and I found not spending a hard habit to break.

We have a mix of regular savings, easy access savings, fixed savings and pension. I'm late 30s. Currently our mortgage rates are lower than our savings so we aren't overpaying but we will use savings to pay off a chunk of the mortgage. We have looked into investing, aside from pensions, as currently we potentially need the money sooner and can't risk shorter term losses even if there would be longer term gains but once we have 3-7 years to ride out the ups and downs we will.

In terms of spending we look at spending now on things that potentially will save us money in the long term. Last year we were in a good position finance and jobs wise so we put money into the house. We replaced the flat roof over our garages with a pitched roof and switched one garages to a workshop/utility room replacing the garage door with a window. If needed it now wouldn't take much work to turn the workshop into a study/habitable room. We had patio doors put in the lounge for access into the garden at the same time which made the summer more enjoyable. We also gave the kitchen an uplift. They units were in good condition but the doors were starting to peel, all the floor tiles were cracked and it just was starting to look a little unloved. Over a year we replaced the doors, worktop, floor and wall tiles. In February I was made redundant and we are now on one wage I'm so glad that I don't have a slightly leaky flat roof and kitchen that's starting to deteriorate to worry about!

Hey Op, do you have any debt other than mortgage? Credit cards to get rid of? If so prioritise getting rid of those, or any loans .

Then build up your emergency savings- particularly with being Self employed- so you have a nest egg if for any reason you lost employment/ couldn't work/ needed to repair the roof. Amount depends on expenses but maybe at least 6 months expenses.

Then as others have suggested, putting into those things that will grow- definitely your pension and other investments. After that pay down the mortgage.

Make some memories with your daughters. If they are secondary school age, they will be adults before you know it. Treat yourself to some lovely things and save as and when you can.

Don't be so ridiculous. This is the money matters forum. OP is asking a perfectly valid question about how to make the best choices regarding saving and investing. Thats the point of the money matters forum. There's no rule to say you can only discuss money if you are skint. Maybe not the forum for you if you aren't able to remove the chip from your shoulder.

I’d put into a managed fund. I would keep the mortgage

I wouldn’t overpay my mortgage. It’s 4.9% and my pension grew by 12.7% in the last 12 months. Pop as much as you can in a SIPP

Build a large model railway or better still a ride on one in the garden

SIPP as a priority as it doesn't sound like you've got a good provision at all.

Repay any debt, emergency fund of 3-6 months of essential outgoings, max out an ISA (or LISA if you qualify) then invest/pension.