- April 6, 2024
- Posted by: legaleseblogger
- Category: Related News
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## Seeking Financial Advice as a Single Parent
Hi All, I’m looking for some helpful advice as a single parent to my primary age kid. Recently, after years of saving up, we were able to move into our own small home. The purchase significantly depleted my savings, so while I am proud of this accomplishment, it feels like I am “starting again.” Currently, I have less than 2k in my savings account.
After taking care of all my expenses and bills, I am left with around £950 per month, and I could use some guidance on how to best allocate this amount.
My plan is to allocate £100 per month into a high-interest savings account for my child, instead of a junior ISA, as I prefer for him not to have access to the funds until he is ready to buy his own place, which might be around the ages of 25-30.
I also intend to set aside £200 per month in a high-interest savings account for my own pension for the future. Additionally, I plan to allocate £300 per month towards overpaying my mortgage, which would potentially shorten the term of the loan from 25 to 15 years if I can maintain this level of overpayment.
Furthermore, I will put £300 per month into an easy access savings account to start rebuilding my financial cushion. I also aim to save £100 per month towards a big traveling trip that I have always dreamed of taking one summer when my child is a teenager.
I already have health insurance, life insurance, and income protection in place. However, I am new to the various savings accounts available and have received conflicting advice from two financial advisors.
I am not looking to become wealthy or retire early, and I am not willing to take high risks with my savings, as I do not have a safety net to fall back on. My goal is to make sensible financial decisions to ensure I have enough for my retirement and to provide financial support to my son. I plan on working until I am 65, which gives me another 26 years of employment.
Do you think this is a wise approach to saving and allocating my income? Do you have any advice based on your own experiences to help me avoid common pitfalls? Thank you for your input!
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****** just grabbed a
No, follow the flowchart: https://ukpersonal.finance/flowchart/
Rebuild your emergency fund, then your longterm savings are really a single pot – it’s [mental accounting](https://thedecisionlab.com/biases/mental-accounting) to have three different pots for stuff that’s happening 10 years in the future.
You can say “I’d like to use 20% for this and 30% for that and the other 50% for…” but really you’re going to invest them in the same ways using the same investment tools (stocks and bonds). In 10 years’ time you can look at the money in your investment account (S&S ISA) and then reassess if you want to spend 20% on <thing>.
Most people should pay off their mortgage around the time they retire and not ages before.
You might find one of these books helpful:
* *[Your Money or Your Life](https://www.amazon.co.uk/dp/0143115766)* – understanding what’s valuable to you and how to use money to achieve your goals.
* *[Millionaire Next Door](https://www.amazon.co.uk/dp/1589795474)* – “How people in normal jobs, electrician is a great example, can accumulate wealth over time through good choices.”^[Electric_Cat_999](https://www.reddit.com/r/UKPersonalFinance/comments/15zkkd4/_/jximlpp/)
* One of Clare Seal’s books – “her focus is on the link between emotions and spending”.
* Watch Lars Kroijer’s [short video series](https://www.youtube.com/playlist?list=PLXy71rkGuCjXLg9N8zowwUpXCYfBcMJFK) and read his book or Tim Hale’s [*Smarter Investing*](https://www.amazon.co.uk/dp/1292444401).
You say you’re using £200/month aside “as a pension” – do you have an actual pension via your workplace already, and this is on top of that? If you do salary sacrifice I’d increase that rather than having £200/month in a cash savings; as it’s much more tax efficient. That £200 could turn into over £250 without costing you anything extra.
Saving in your own name for your child is sensible.
Personally I’d prioritise rebuilding your emergency fund over overpaying the mortgage in the short term. You could always keep it aside and pay off a lump sum at the end of your fixed term if you haven’t needed it in an emergency; and by that time you should still have a decent whack saved from the other £300/month you’re saving.
Hi /u/Daffodil_spring12, based on your post the following pages from our wiki may be relevant:
* https://ukpersonal.finance/investing-for-your-children/
* https://ukpersonal.finance/pensions/
* https://ukpersonal.finance/savings/
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I suggest you put the minimum lump sum to open a Junior ISA and Junior SIPP, making no further contributions.
The Junior ISA will make a nice 18 birthday present.
The Junior SIPP will get them started early on their retirement savings.