From saving to budgeting: Ask Plum's experts your family finance questions. £200 voucher to be won!

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It’s been a long (and probably expensive!) summer keeping the kids entertained or going away on holiday, and now everyone’s heading back to school, it’s a great time to think about getting your family finances back on track.

Whether you're thinking about university costs, saving for Christmas or your next holiday, managing childcare costs, or simply want to get better at budgeting, our experts Will and Susanna are here to answer any money questions you may have!

How to enter:

• Share your question in the thread by 11th October
• One lucky Mumsnet user will win a £200 voucher for a store of their choice
• Will and Susanna will be back shortly to answer a selection of your questions

Meet the experts

Will Bryant is Director of Wealth Strategy at Plum. He's a former financial adviser and dad of three boys, so brings both financial expertise and plenty of first-hand experience of family life.

Susanna Wood is Communications Lead at Plum and, as a parent herself, cares passionately about making money matters accessible to all. She'll be bringing a practical, everyday perspective to your questions about managing family finances.

About Plum

"When it comes to money, families need to make every penny count, but finding the time and energy to sort your finances is tricky.

We describe Plum as the ultimate smart money management app, because it automates those parts of personal finance you might find difficult or don’t have time for..

Our app can help you automatically set more money aside, choose saving and investment products that can grow your money over the long-term and analyse your spending so your money is working as hard as you do!

And for an extra boost, we'll give you a £10 welcome bonus when you deposit £1 into any Plum ISA within your first 3 months. T&Cs apply."

It’s great that you’re thinking about your children’s future already! There are a few key things to consider as you get started.

First, think about some specific goals – for example, your child's wedding, university fees or a deposit for their first home are all popular goals. You'll need to understand how much you will need for this goal and how long you have to get there as well before you start planning your budget. You’ll also need to choose the right product depending on the goal. For example, a Junior SIPP is a great tax efficient product for long-term saving for your child, but as they won’t be able to access it until they are 57, subject to change, it won’t work if they might need the money for a house deposit at 25.

Second, build a savings habit. You can automate the saving process by using an app like Plum, which puts money aside for you directly into a savings account or investments.

Third, make sure your savings are working as hard as you are! You can earn interest on cash or invest your money for potential higher returns, if you can afford to take on some risk. The earlier you start earning interest or returns on your savings, the more you will benefit from the power of compounding over time.

Finally, ensure you are using the right product. If you’re saving for your child, it may make sense to explore a Junior ISA (this can be cash or stocks and shares). But this will only work for you if you are happy for the account to be fully in your child' s name with them getting full access to the money at 18.

Good luck!

If excel is working well for you, that’s great! But it’s worth exploring how technology can make parts of managing your money easier.

For example, an app can act as a ‘command centre’ for your finances where you can see all your income and outgoings in one place. Rather than having to manually input your spending into a spreadsheet, an app can do this automatically for you and give you analysis on your spending so you know where you can spend less.

But you can also use smart money apps to do things automatically for you. With Plum for example, you link your bank account directly to the app and then Plum will save automatically for you, saving more or less in reaction to how much you are spending that week. That means you keep up the saving habit without ever being caught short on funds. You can also set up saving “rules” such as saving a certain amount on payday, or rounding up purchases and depositing the extra.

Plum takes a proactive approach to helping you grow your money and build positive financial habits. Rather than you having to decide how much to put aside and manually moving it to a savings account, Plum links to your bank account and does this automatically for you.

Once the money is saved into Plum, you can split the money between savings and investments as you see fit. Plum offers a broad range of savings and investment products ranging from ISAs, investment and pension products with access to world class funds at competitive rates.

Plum also offers you access to Plum Plan, powered by AI, it can give you financial guidance, a safe space to ask any question and even create a plan for you to help you reach your goals.

One thing I’ve learnt is that it’s really important to be realistic about your finances. A lot of people try to set a budget but don’t realise that they are not accurately assessing their income and outgoings, and often vastly overestimate the amount they can save each month. This can be very demoralising and can cause a lot of people to give up on their saving goal quite quickly.

The 50/30/20 rule (where 50% is needs, 30% is wants, and 20% is savings or paying off debt) is a really good structure for starting to split your income.

Review what you’re spending under those categories to clearly view where you are spending money and it will become much easier to get started with your budget.

Saving for an emergency fund is a really important thing to do.

According to research carried out by the FCA, more than 1 in 5 of us don’t have cash savings of at least £1,000 to cover any of the unforeseen expenses that life throws at us from time to time. So that would be a great target to aim for initially. Once you have that covered, we typically recommend that you grow this to cover at least 3 months worth of essential expenditure.

The Plum Plan feature on the Plum app can help you set up a pot for your emergency fund and work out how much you would need to save each month or tell you how long it would take to get there using any money you can afford to put aside each month.

Start by separating your debts into two groups: priority and non-priority.

Not all debts are equal, and you need to secure your basic living needs first. Priority debts are the ones that carry the most serious consequences if they're ignored — things like your rent or mortgage, council tax, gas and electricity, court fines or child maintenance. If these go unpaid you could lose your home, have your power cut off or face bailiff action, so they come first.

Non-priority debts include credit cards, personal loans, overdrafts, store cards and Buy Now Pay Later schemes like Klarna or Clearpay. Creditors for these can be noisy and send intimidating letters, but they can't immediately take your home or cut off your essentials. Never sacrifice your rent or heating to keep up with a credit card minimum.

Next, get everything down on paper. Write down what you have coming in, what your bare-bones living costs are — food, shelter, energy — and list every debt you owe, who it's to and the interest rate. It can be scary to see the full picture in black and white, but knowing the reality is the first step to taking back control.

If you're behind on any of those priority debts, contact those creditors straight away. Let them know you're struggling. They're heavily regulated and have hardship policies in place — most will agree to an affordable payment plan if you're upfront with them.

And please, you don't have to figure this out on your own. Don't ever pay a private company for debt advice — there's brilliant free help available. StepChange Debt Charity (stepchange.org) is completely free, non-judgmental, and they really know what they're doing.

You can use their online tool or call them, and they'll help you build a realistic budget, talk to your creditors on your behalf, freeze interest and set up a Debt Management Plan if that's the right route. Citizens Advice and National Debtline are also excellent.

Please don't bury your head in the sand, and try not to take out more credit to cover existing debt. So many people will tell you the relief they felt after making that first call to StepChange was huge. You've got this.

It’s definitely tricky to know what is the best choice, unless you have the ability to look into the future. Junior ISAs are a tax-efficient way to save for your child's future, but as they are in the child's name they will get full access at 18.

If you'd rather have full control, a stocks and shares ISA in your own name might be a better bet, then as your children grow up more you can look at other options, such as a trust, to pass the wealth on in a way that works for you.

You could also look at Junior SIPPs, which have been gaining popularity recently, which actually keep the money invested until your child is 57, subject to change – so you are ensuring they will only be able to access the nest egg much later on.

Do remember that if you choose one of these investment options, your money can go up and down.

Yes, you can absolutely split your ISA savings between stocks and shares and cash. You don't need to open two separate ISAs with the same provider to do this — many platforms, including Plum, let you hold both a Cash ISA and a Stocks & Shares ISA within the same app. You can also hold them with different providers if you prefer.

The key rule to remember is that your total ISA contributions across all types cannot exceed £20,000 in any single tax year.

So if you wanted a 50-50 split, you could put up to £10,000 into a Cash ISA and £10,000 into a Stocks & Shares ISA, for example. You're free to choose whatever split works for you.

This kind of approach can make a lot of sense.

The cash portion gives you stability and easy access — your capital is protected and you'll earn a predictable rate of interest.

The stocks and shares portion gives your money a chance to grow faster over the longer term, but the value will go up and down and you could get back less than you put in.

How you split it depends on your circumstances. If you have a shorter-term goal within the next few years, you might want more in cash.

If you're saving for something further away, leaning more towards stocks and shares could give your money a better chance of beating inflation over time.

There's no single right answer — it's about what feels right for your goals, your timeline and how comfortable you are with the value of your investments moving around.

It’s great that you want to help your 17-year-old save, and the most effective starting point is getting them earning their own money through a part-time job or paid odd jobs. Encourage them to move their earnings into savings as soon as they arrive rather than saving whatever is left at the end of the month, because that habit does more than any lecture.

For the account itself, many banks offer easy-access and regular saver accounts for 16 and 17 year olds, and regular savers often pay higher rates in return for monthly deposits, which suits part-time income. A Junior ISA is another option, since at 16 they can manage one themselves and up to £9,000 a year can be paid in by them or by family. It’s tax-free, but the money is locked away until 18, when it becomes an adult ISA. An adult Cash ISA is available from 18 and offers more flexibility, though the allowance rules have been changing, so check the current limit. They can’t hold an adult Stocks & Shares ISA until they turn 18.

It’s worth planning for their 18th birthday too, because at that point they get full control of any money in their name. They can then open a Stocks & Shares ISA or, until they’re 39, a Lifetime ISA, which comes with a government bonus towards a first home or retirement. The Lifetime ISA rules have been under review, so check the current position before relying on it.

To make saving feel more like a game than a lecture, you could offer to match what they put away, for example £1 from you for every £2 they save, and show them what their savings could grow to over time and what that money could buy.

Finally, watch the tax. Most teenagers pay no tax on interest thanks to the personal allowance and the Personal Savings Allowance, but if money you give them earns more than £100 a year in interest, it’s taxed as yours, unless it’s held in a Junior ISA.

You can open a savings account for a child from the day they’re born, and there’s no real downside to starting early. The longer money has to grow, the more it benefits from compounding, which simply means that interest or returns are themselves earning interest or returns as time goes on. That matters because inflation steadily erodes what money can buy, so savings need a chance of keeping up. In the early years, though, the amount you pay in matters far more than the growth, so the real benefit of starting young is building the habit and letting small regular sums add up.

From birth, the main options are a children’s savings account, usually held by a parent or guardian on the child’s behalf, or a Junior ISA, which is tax-free and can take up to £9,000 a year in total from anyone. A Junior ISA can be cash or stocks and shares. Cash is safer but can struggle to beat inflation, since it only does so if the interest rate stays above it. For money that won’t be touched for 10 to 18 years, shares have historically had a better chance of beating inflation, though they can fall in value along the way, so they suit money you can leave alone through the ups and downs.

It’s worth knowing that whatever sits in a Junior ISA or an account in your child’s name becomes theirs to spend at 18. If you’d rather keep control beyond that point, you could save in your own name, such as through your own ISA, and hand money over when you judge the time is right, or look at a trust with the help of a solicitor.

Tax is the last thing to watch. If you, as a parent, give your child money that earns more than £100 a year in interest, that interest is taxed as your income. Gifts from grandparents and other relatives don’t trigger that rule, and Junior ISAs are exempt from it too.

If you can put away £50 a month for the next eight years, you’ll have paid in £4,800 by the time your child turns 18. That’s the part you’re certain of. What it grows into depends on where the money is kept, and nobody can promise a figure.

To give you a feel for it, here are some rough illustrations:

If the money earned around 3% a year, which is what a decent savings account might pay, you’d end up with about £5,400. At 5% it would be around £5,900, and at 8%, which is what you might hope for from a higher-risk investment in shares, it would be roughly £6,700. These ignore fees, which can take a noticeable bite out of small sums, so compare platform charges before you choose. Notice that even at 8%, the growth adds only about £1,900 to the £4,800 you put in. Over a short period like this, the money you pay in does most of the work, so anything extra you can add, such as birthday money from relatives or a bonus, will make more difference than chasing a higher return.

The higher return comes with a catch. An 8% figure is an average over many years, not something you’d see every year. Shares can fall, sometimes sharply, and a drop of 20 to 30% in the last year could wipe out somewhere between £1,300 and £2,000 just when your child needs the money. Eight years is not a long time for shares, so a sensible approach is to keep the money invested for the first five or six years, then gradually move it into cash over the last two or three. You might give up a little growth if markets keep rising, but you’re protected if they fall at the wrong moment.

For where to put it, a Stocks and Shares Junior ISA is a good fit if you’re happy for your child to get the money at 18. Anything it earns is tax-free, and anyone can pay in up to £9,000 a year. A low-cost global tracker fund is a common choice because it spreads your money across thousands of companies around the world, rather than relying on one country.

There’s no single right answer, but for many families a mix works best. A joint account that both of you pay into covers the shared bills, such as the mortgage or rent, utilities and food, while each of you keeps a separate account for personal spending and your own savings. If your incomes differ, you can each contribute a proportion of what you earn rather than an equal amount, which tends to feel fairer.

Joint accounts are practical but they do carry risks. Usually both of you are responsible for any overdraft, either of you can take out the whole balance, and your credit files can become linked. If you’re married or in a civil partnership you have more legal protection if things go wrong, whereas unmarried couples should keep clear records of who has put in what. It’s also worth remembering that a joint account normally passes to the survivor, which can be helpful but may not match what your will says.

Separate pots for specific purposes, such as an emergency fund, holidays or your children’s savings, make it easier to see where the money is going. Whatever you choose, make sure each of you understands the household’s finances and has some money in your own name, so neither of you is left stuck if circumstances change.

Start by working out what you want to cover.

Tuition fees are normally paid by a student loan that your child repays later, once they earn enough, so most families don’t save for them. The bigger question is living costs.

The maintenance loan depends on household income and often falls short of what a student really spends, so if you’d like to top it up by, say, £3,000 to £5,000 a year over three years, you’re aiming for roughly £9,000 to £15,000 in total.

With five years to go, that works out at roughly £150 to £250 a month. As an illustration, £150 a month for five years is £9,000 paid in, and at around 5% a year it could grow to about £10,200. At £200 a month it would be about £13,600. These are examples, not promises, and they ignore fees.

Because five years is not long for shares, keep most of this money in cash or a cautious mix, and avoid a high-risk fund that could fall just before term starts.

A cash ISA or a good easy-access account is a simple choice. If you hold it in your own name, you keep control and can pay your child a set amount each term. A Junior ISA also works, but the whole balance becomes theirs at 18.

A Stocks and Shares ISA and a global tracker fund do different jobs, so you don’t have to choose between them. The ISA is a tax-free container that you can pay up to £20,000 into each tax year, and any growth or income inside it isn’t taxed. A global tracker fund is something you put inside that container. It automatically follows a big index of thousands of companies around the world, rather than relying on someone picking shares, which keeps the charges low.

On risk, the ISA itself adds none, because the risk comes entirely from what you hold inside it. A global tracker is made up entirely of shares, so it will go up and down, and it could drop 20 to 30% in a bad year. Being spread across many companies and countries protects you from any one of them failing, but it can’t protect you when markets around the world fall together, so it suits money you can leave alone for at least five years, ideally longer.

Your colleagues’ point about compounding is that any growth you leave invested starts earning growth of its own, which makes a real difference over many years. Putting a global tracker inside a Stocks and Shares ISA is a popular way to do this, since you keep all of that growth without paying tax on it. Before you start, compare the platform fee and the fund’s annual charge, as these eat into your returns every year.

There isn’t one “best” account, because it depends on how long the money will be saved and what you want to happen at 18. For money you might need within a few years, a children’s easy-access or regular saver account is simple, and rates are often competitive. A Junior ISA is the main alternative.

It can be a cash version or a stocks and shares version, anyone can pay in up to £9,000 a year, and everything inside it is tax-free. Children can usually earn some interest tax-free anyway, so the tax saving matters most when a parent is the one giving the money.

If you, as a parent, give money that earns more than £100 a year in interest, that interest is taxed as yours, unless it’s in a Junior ISA. For money you won’t touch for ten years or more, the stocks and shares version has historically had a better chance of beating inflation, though it can fall in value along the way.

Whichever you pick, anything in an account in your child’s name, including a Junior ISA, becomes theirs to spend at 18. If you’d rather keep control beyond that, saving in your own name and gifting later is the alternative.

“Bonds” can mean several different things, so it helps to know which one you’ve been offered.

A fixed-rate savings bond pays a set rate if you lock your money away for a fixed period, often one to five years, and you usually can’t withdraw early without a penalty. It suits money you know you won’t need, but it’s less flexible, and rates can look worse if interest rates later rise.

Premium Bonds, from NS&I, don’t pay interest. Instead, each £1 bond is entered into a monthly prize draw, the prizes are tax-free, and you can’t lose your original money, though you might win less than inflation.

A parent or guardian can buy them for a child. Bond funds and government bonds (gilts) are investments rather than savings. They are usually steadier than shares but their value can still go down, particularly when interest rates rise.

The most important protection is to keep some financial independence and visibility, whatever your relationship looks like. That means having a bank account and some savings in your own name, even if you also share a joint account for bills, and knowing roughly what your household owns and owes. Keep copies of key documents such as the mortgage or tenancy agreement, bank statements, pension details, tax returns and your children’s birth certificates, and check your own credit report from time to time, so you can spot any debt taken out in your name without your knowledge.

If you’ve stopped work or reduced your hours to look after children, protect your future as well. Ask your partner to pay into a pension in your name, and claim Child Benefit while your child is under 12 even if you don’t take the payments, since it keeps your state pension record intact. Your partner’s savings and pension are not automatically yours, so a joint arrangement that you both understand is far safer than having everything in their name.

Marriage or civil partnership gives you much stronger legal rights if you split up, including a claim on the family home and a share of pensions. If you’re not married, the picture is very different, so it’s worth checking whose name is on the home. If it isn’t yours, a solicitor can set out a written agreement about who owns what. Either way, make sure you each have an up-to-date will and, if you have children, think about life insurance so that they’re looked after if something happens to one of you.

Financial abuse can be subtle, such as a partner controlling all the money, checking every purchase, stopping you working, hiding financial information or pressuring you to take out loans. If any of this sounds familiar, you’re not overreacting, and help is available. Surviving Economic Abuse has guidance and a directory of support, and the National Domestic Abuse Helpline (0808 2000 247, free and open 24 hours) can talk it through with you.

Good luck in retirement!

Having some cash savings to support unforeseen costs is a very good idea.

While working, we would normally suggest holding at least three months' worth of essential spending in an easily accessible account. In retirement, you might consider increasing this to six or even twelve months, depending on your circumstances and how secure your other income is. There is no single right answer, but you need to be comfortable that you can cover unexpected costs without having to sell investments at the wrong time.

If you have any big plans over the next five years, such as a special holiday or a significant birthday celebration, you might also want to keep that money in cash so it is available when you need it.

Beyond this, however, holding too much in cash over the long term can mean inflation gradually erodes its purchasing power. Investing some of your money could give it a better chance of growing in real terms, although returns are never guaranteed and you could lose money.

Bonds are one option worth considering. These are essentially loans to governments or companies, which typically pay interest and return the original amount at maturity, provided the issuer does not default. UK government bonds, known as gilts, can offer attractive yields, but it is important to compare these with the best available savings rates. A bond's yield is not the same as a guaranteed return if you sell before maturity, because its market price can rise or fall as interest rates and market conditions change.

You could also consider investing your £5,000 in a low-cost, diversified multi-asset fund. These funds typically hold a mixture of shares and bonds, giving you exposure to the potential long-term growth of the stock market without relying on individual companies. A more cautious fund would generally hold a greater proportion of bonds, while a growth-oriented fund would hold more shares. Even cautious funds can fall in value, so you would need to be comfortable with some investment risk.

It is worth thinking about whether your priority is generating income now or growing your money to support your income in the future. For example, a 5% return on £5,000 would equate to £250 a year before tax, but investment returns are not guaranteed and may not be paid as regular income.

It is also worth considering whether you could use some of your £20,000 cash reserve to cover occasional expenses rather than relying entirely on investment income.

My suggestion would be to keep enough cash to provide security and cover planned spending, then consider a diversified investment for the £5,000 if you can leave it invested for at least five years and accept that its value may fall in the meantime.

Before making a decision, check whether you have any existing pensions or other savings that could affect your overall investment strategy, and consider whether a Cash ISA or Stocks and Shares ISA would be appropriate for your circumstances.

First, learn to live below your means. Earning more is important, but building the habit of spending less than you earn gives you freedom, resilience and choices. Don’t let lifestyle rise as quickly as your income.

Second, understand the difference between saving and investing. Saving is for money you might need in the short term; investing is for building wealth over the long term. Teach them about pensions, ISAs, compound growth, inflation and the cost of debt early, because time is their biggest financial advantage. Even small amounts invested consistently can become significant over decades.

Finally, make money work for the life you actually want. The goal isn’t to become obsessed with money or simply accumulate the biggest number possible. It’s to have enough financial security and freedom that money doesn’t dictate every decision you make.

I’d want my children to understand that their future financial position will be shaped far more by the habits they build in their teens and twenties than by one big salary later in life.

It's never too early to start planning your Christmas finances! In fact, the earlier the better – some Plum customers start putting small amounts aside from January onwards!

But that said, at 2, your daughter is at an age where even small, secondhand gifts can be really exciting.

She may even be more interested in unwrapping the presents than the presents themselves! Don't feel pressured to overbuy by other parents / social media.

It can be really challenging to save when you feel like the money just ends up being spent on essentials. It doesn't sound like you have a discipline problem, but you may be facing issues when it comes to cashflow.

There are a few tips and tricks you can employ to ensure the savings start adding up.

First make sure that you are putting your money in a separate account, ideally with a good interest rate. If it is not in your current account then you will be less likely to spend it.

Consider small but regular automated savings – you can even round up all expenses to the nearest pound and put the change straight into a savings account. These small but regular savings add up to a lot over time.

Congrats to your son! There are plenty of resources out there but it can feel overwhelming knowing where to begin.

He may be used to using AI to ask questions, and while platforms like ChatGPT and Gemini can be useful for broad personal finance queries, they are not always accurate or trustworthy when it comes to financial information. He could take a look instead at an AI service that is specifically designed by financial experts, like the Plan tool on the Plum app.

For someone just starting out, I think the biggest advantage is getting going. He doesn’t need to have everything sorted right now – if you can help him see the value of saving regularly, understands his pension, avoids expensive debt and gives his money time to grow, you’ll have done a great job of supporting him!

It’s great that you’re thinking about both sides of this: giving your child a head start on a pension and something to help them find their feet in adult life. There’s no single right split, but a few things might help you decide.

What each account does for you

A Junior SIPP is your long-term play. The government adds 20% tax relief to what you pay in, so a £2,880 contribution becomes £3,600 (the most you can put in each year). Money invested at birth has 50+ years to compound, so even small amounts can grow into something meaningful. The catch is that your child can’t touch it until the minimum pension age, which is 57 from April 2028 and likely to rise further by the time they get there.

A Junior ISA gives you no upfront boost, but growth is free from tax and you can put in up to £9,000 a year. At 18 the money becomes your child’s to spend however they like. That flexibility is what makes it so useful for early adult life, but you do have to be comfortable that it’s no longer yours, and that they might not spend it how you’d like. It can be a great way to start conversations about money and investing, and you could even make investment decisions together as they get older. Remember that with any investment, returns aren’t guaranteed and the value can go down as well as up.

How I’d think about the balance

Your child can start a pension later through work, with employer contributions and tax relief at their own rate, which may be higher than 20%. But an 18-year-old’s head start for uni costs, a car or a house deposit can’t be recreated later. That’s a good reason to lean towards the Junior ISA. On the other hand, time is the pension’s superpower, so it’s worth putting at least something in the SIPP, even if it’s a small monthly amount.

Many families end up somewhere around 75-90% in the Junior ISA and 10-25% in the SIPP, which gives a real cushion at 18 plus a small pension seed. If you can comfortably fund both, a more even split is perfectly reasonable too. And if you’re a little nervous about your child having a big lump sum at 18, a larger SIPP share acts as a built-in safeguard.

One handy extra: at 18 the Junior ISA converts to an adult ISA, and your child could then move money into a Lifetime ISA (ages 18-39), which adds a 25% government bonus towards a first home or retirement.

A simple way to start

Pick a monthly amount for the SIPP that feels meaningful but doesn’t squeeze you, put the rest into the Junior ISA, and automate both so it happens without you having to think about it. You can always change the split as your circumstances, and your child’s needs, become clearer.

It’s great that you’ve been putting money aside every month, and that you’re thinking about this ahead of the remortgage. The money is probably best put towards the mortgage rather than held back, but the reason is financial rather than admin.

Will it make the remortgage easier?

Only a tiny bit. When you remortgage, your solicitor and new lender get a figure from your old lender for what you still owe on the day you switch. Nobody needs your annual statement to work that out. The one small plus is that you won’t have to juggle a lump sum from your savings at the same time as completing the remortgage. But I wouldn’t make the decision on that alone.

Where you are now

Putting your overpayments into a savings account that pays more than your mortgage costs was a smart move, as you’ve effectively pocketed the difference while keeping the cash accessible. A good rule of thumb is that while your savings rate beats your mortgage rate, keeping the cash makes sense. Once your mortgage rate is higher, overpaying wins. As your savings mature next month, you’ll probably be offered a lower rate, so that advantage may be about to end.

The bit that could really matter: your loan-to-value

Lenders price their mortgages in bands, based on how much you owe compared with your home’s value. The best-priced deals tend to kick in at 60%, 75%, 80%, 85% and 90%. For example, if your home is worth £400,000 and you owe £305,000, you’re at about 76%. Paying off £10,000 takes you to about 74%, which could move you into a cheaper band and save you far more than the interest you’d earn on the cash. If you’re nowhere near one of those points, it won’t matter much, but it’s worth checking before you decide.

Things to check with your lender first

• Whether your overpayment is within the limit. Many lenders allow around 10% of the balance each year without a charge, and you’ve said you’re under it, which is great.

• Whether the overpayment shortens your mortgage or lowers your monthly payment, as some lenders let you choose.

• What date the money actually counts from, rather than the day you send it, as that’s when your interest starts to fall.

A simple way to approach it

1. Let your savings mature and keep around three months of essential spending in easy-access savings as a safety net.

2. Work out where you’d sit in those bands, both with and without the overpayment.

3. If the lump sum would get you into a cheaper band, or your savings rate has dropped below your mortgage rate you could consider over paying.

You can usually lock in a new deal about six months before your current one ends, so you don’t need to leave it until the last minute.

One thing you can do is to give them the opportunity to make financial decisions from a young age, so they can experience the consequences of their actions. If they get pocket money, give them a way to save it – you could set up a bank of mum and dad which pays "interest" every month while the money is saved.

You can also set up a Junior ISA in their name and choose the investments together. You can allow them to choose funds that specialise in something that they are interested in, such as Tech or specific brands they know and like. Sitting down together regularly to review the performance of the fund will help them get into the habit of checking in with their finances.

Thanks - It seems really difficult to open a new bank account for savings - any easier way you can think of for another 'rainy day account' ?