Thursday, 5 May 2011

Sorting out my new financial landscape....

May has been the start of my saving plan, last month after fifteen years, I changed banks and have opened a regular saving plan with my new bank which allows me to save up to £300 a month at 8% for twelve months only. I plan to start up an e-ISA account (if your in the USA think Roth IRA or 401k sort of) once I have fully funded my emergency fund of £1k.
Where to put my emergency fund has been a problem as I want to get some interest from the account if possible and it needs to be an account I can have easy access too should I need it.
After looking at some comparison web sites I have decided on a Santander online account as it offers a half decent interest rate. Okay it's not every ones favorite bank but as it is online I am hoping to avoid as much contact as possible with the physical bank and hope the cyber side of Santander is better to deal with.
In my online Santander saving account I plan to save my emergency fund and also my income tax payments so this account will probably be holding a running balance of about £3k.
Once that is done I will open an e-ISA account, this will be for my (Dave Ramsey) baby step 3 ie. saving up 3-6 months of expenses. I plan to save a further £4k in this account.
Finally my regular saving account is to build up a deposit for a house (or what ever I decide to do with my section once I make up my mind). The accounts high interest is only for a year and I will not have saved enough so will have to go looking of another account to put the balance in.
So the plan is so far:

  • online saving account for (baby step 1.) Emergency Fund

  • e-ISA account (baby step 2.) Saving up 3-6 months expenses

  • regular saving account Saving up deposit for building plans
All of my plans so far just cover my financial plan for this current year and don't include any investing I would like to do in the future. Next year I would like to open an investment account, fund a second ISA account and also look at possibly opening a fixed term saving accounts. What do you think? Am I wrong and if so why?


karen said...

Sounds good to me. Separating savings from a general working account has to be a good thing - you can pretend it doesn't exist! I've just put some money into an online 12 month term deposit at 6.5%, calculated daily. It's a real incentive being able to log in and see the interest adding up, even after just a week or so.

Debt Payer said...

Good luck with your journey out of debt. I enjoyed looking through your old posts and seeing your progress. Your well on your way.

LisaClark said...

Thanx Karen - it is the exciting part now of checking out credit rates and watching my networth slowly go up. Maybe I'll go for term deposits next year when I have some money to salt away.
Debt Payer:I really liked the post you put on So Over Debt's blog - you're still young (gosh can't believe I said that) but you are and your on the right track with your finances. Keep away from credit cards and don't believe the hype of keeping up with the Joneses cos those folk are next to broke. You will get there never fear!

Ganhar Dinheiro said...

Excellent article, I loved the information.

Harriett Faulks said...

How are your finances these days? I hope your new bank has been a big help to sort them out. I think there’s still a lot to be said about setting aside some money at the end of every day. Maybe you can buy a money bag or at least a sturdy canvas pouch to let your money accumulate. Once it’s full, it might turn out to be a big help to you.