Long term saving
Discussion
I turn 30 next week and have decided on a 30 year plan to reach financial freedom and retirement. Redundancy has made me think again about my finances, luckily I was only out of work for one week. I have always been relatively sensible, but susceptible to spending out on luxuries and having effectively no savings. Kids don't help either!
I still want to live a life, but feel that I can save a few hundred a month if I just make some good decisions. The Company car I had to give back when I lost my job is now replaced with a second hand focus for example. It is quite amazing the sums that build up over such a long period of consistent saving, but discipline will be important!
Is anyone doing something similar? What helps you save? I could set up a standing order to move money to a saving account but wonder if moving into shares and then property after tax free allowances have been filled up (or even before) help to create interest in saving itself and stop me raiding a saving account.
Paying off the mortgage early is key and I would like to see those years tumble!
I still want to live a life, but feel that I can save a few hundred a month if I just make some good decisions. The Company car I had to give back when I lost my job is now replaced with a second hand focus for example. It is quite amazing the sums that build up over such a long period of consistent saving, but discipline will be important!
Is anyone doing something similar? What helps you save? I could set up a standing order to move money to a saving account but wonder if moving into shares and then property after tax free allowances have been filled up (or even before) help to create interest in saving itself and stop me raiding a saving account.
Paying off the mortgage early is key and I would like to see those years tumble!
craigb84 said:
I was recently advised to look into a stocks and shares ISA. There are hundreds of funds to choose from and some perform very well. They're essentially a managed fund. I think you can invest up to around £10k a year.
and if you seriously want to get into this and learn all about investing, you should sign up here:www.investorschronicle.co.uk
There's also a weekly print edition.
covmutley said:
I turn 30 next week and have decided on a 30 year plan to reach financial freedom and retirement. Redundancy has made me think again about my finances, luckily I was only out of work for one week. I have always been relatively sensible, but susceptible to spending out on luxuries and having effectively no savings. Kids don't help either!
I still want to live a life, but feel that I can save a few hundred a month if I just make some good decisions. The Company car I had to give back when I lost my job is now replaced with a second hand focus for example. It is quite amazing the sums that build up over such a long period of consistent saving, but discipline will be important!
Is anyone doing something similar? What helps you save? I could set up a standing order to move money to a saving account but wonder if moving into shares and then property after tax free allowances have been filled up (or even before) help to create interest in saving itself and stop me raiding a saving account.
Paying off the mortgage early is key and I would like to see those years tumble!
Good luck to you!I still want to live a life, but feel that I can save a few hundred a month if I just make some good decisions. The Company car I had to give back when I lost my job is now replaced with a second hand focus for example. It is quite amazing the sums that build up over such a long period of consistent saving, but discipline will be important!
Is anyone doing something similar? What helps you save? I could set up a standing order to move money to a saving account but wonder if moving into shares and then property after tax free allowances have been filled up (or even before) help to create interest in saving itself and stop me raiding a saving account.
Paying off the mortgage early is key and I would like to see those years tumble!
I turn 30 next June and think I'll be in a similar situation to you - hopefully a balance transfer left over from our wedding this year and some home improvements will have gone and we'll be in the situation of effectively starting from scratch and looking to build up our savings pot which will, most likely, be at nil!
An ex-boss of mine always referred to the 1/3 rule. Prepare your budget each month, working out what's left and putting 1/3 into long term savings (i.e. pension), 1/3 into medium term savings (investments or paying off mortgage) and 1/3 into short term savings (i.e. instant cash ISA). Whilst I know the latter will be paying next to nothing, its the instant access element which is vital.
I did save pretty hard for our wedding and what I found useful was setting up a standing order to a building society where you physically have to go in and draw the money out via a book (i.e. they don't have internet access). I managed never to actually take any money out until we had to pay wedding based bills. I also set up a standing order to a Virgin Unit Trust and once again due to the efforts of having to withdraw funds I didn't touch it. Conversely I have an on-line savings account next to my main current account, but found when I logged in to internet banking I used to see it as available funds and spend it!
It sounds like you've recently started a new job so some of these may not be available to you as yet, but it's important that you take advantage of any tax advantages that may be available to you.
i) You mention kids - (if appropriate) can you sign up for childcare vouchers (paid from salary pre-tax)?
ii) If you work for a listed company and intend to do so for the mid to long term, do they offer a SIP / SAYE schemes you could sign up for?
iii) Do you have a company pension? Read all the information available on the scheme. Read it again. Understand what options are available to you through the scheme and make sure you understand their implications as much as possible. If you don't understand 100%, ask for (professional) advice.
As you're saving long term, use tax efficent products. Your ISA allowance for this year is £10,680, half of which can be saved in a cash ISA, the rest (up to the total amount if you don't need cash savings) in a stock and share ISA. The funds I keep are in line with a rough strategy of:
a) 30 - 40 yrs: medium to high risk (I'm 31, and enjoying this at the moment, but it's not for everyone)
b) 40 - 50 yrs: medium risk
c) 50 yrs to retirement: low risk
If the mechanics of this isn't your area or of particular interest to you, ask somebody for (professional) advise.
Are you investing for your kids? Have a look at the new child ISAs which come out in November.
Also, I keep cash savings roughly equivilant to a year's pre-tax salary. You never know what's around the corner.
i) You mention kids - (if appropriate) can you sign up for childcare vouchers (paid from salary pre-tax)?
ii) If you work for a listed company and intend to do so for the mid to long term, do they offer a SIP / SAYE schemes you could sign up for?
iii) Do you have a company pension? Read all the information available on the scheme. Read it again. Understand what options are available to you through the scheme and make sure you understand their implications as much as possible. If you don't understand 100%, ask for (professional) advice.
As you're saving long term, use tax efficent products. Your ISA allowance for this year is £10,680, half of which can be saved in a cash ISA, the rest (up to the total amount if you don't need cash savings) in a stock and share ISA. The funds I keep are in line with a rough strategy of:
a) 30 - 40 yrs: medium to high risk (I'm 31, and enjoying this at the moment, but it's not for everyone)
b) 40 - 50 yrs: medium risk
c) 50 yrs to retirement: low risk
If the mechanics of this isn't your area or of particular interest to you, ask somebody for (professional) advise.
Are you investing for your kids? Have a look at the new child ISAs which come out in November.
Also, I keep cash savings roughly equivilant to a year's pre-tax salary. You never know what's around the corner.
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