Important Information: The information in this article is not a personal recommendation for any particular investment. If you are unsure about the suitability of an investment you should speak to an authorised financial adviser. Please also be aware that the value of investments can go down as well as up, and you may get back less than you invest. Tax treatment depends on individual circumstances and all tax rules may change in the future.
If you have followed my blog for a while, you will know that we are currently a single part-time income household while my husband retrains.
This means that we do not have a huge amount of disposable income, so we don’t have a lot of spare money to invest and grow our savings.
At least, that’s what I thought.
There are many misconceptions surrounding Stocks and Shares ISAs.
‘They’re too complicated’. ‘You need a lot of money to start investing’.
As it turns out, both of these perceptions are inaccurate.
Anyone can start, all you need is a bit of guidance and as little as £50 a month.
I’m working together with Fidelity on their ‘Invest For The Moments That Matter’ campaign.
With the end of the tax year only a month away, they’re on a mission to help people get the most out of their money.
Are Stocks and Shares ISAs Complicated?
I think a lot of us who are not experienced with S&S ISAs are afraid to dip our toes in the water because we believe it is too complicated.
It doesn’t help that there are seemingly endless options out there, so how do you know where to start?
Fidelity have over 50 years’ experience and can help guide customers on their ISA journeys making the process easier to navigate.
But I Don’t Have Any Money To Invest!
Do you have a savings goal? Or perhaps just a savings dream as you’re not sure you’ll ever be able to achieve it?
According to a study conducted by Fidelity, just cutting out your morning takeaway coffee* could save you £50 a month to invest.
It might not seem like much, but this could make you more than £7,000 after 10 years and almost £18,000 after 20!**
Perhaps you don’t buy takeaway coffee, but have you considered where else you fritter your money away?
For me it’s takeaways and convenience food.
In fact, I decided to delve deeper into my own spending habits and in the month of September 2019, we spent a whopping £160.37 on takeaways and convenience food.
Okay, it was my husband’s birthday in September, so we can probably allow a little for that, but even so – what a ridiculous amount of money!
If I could put that money into a S&S ISA every month we would probably already have hit one of our big financial savings goals.
So given my eye-opening example, can you think of any little luxuries you could cut out to save for your big goals?
*Data based on shop-bought coffee costing £2.50 a day for 5 days a week
**Source: Fidelity International, February 2019 – based on a hypothetical illustration assuming a rate of growth of 5% a year, no initial charge, a platform service fee of 0.35% and an annual management charge at 0.75 %.
My Savings Goals
We have discussed our financial goals at length, but have put off actually working towards them until my husband is working full time again.
One of the first goals we want to work on is saving a £3,000 deposit for our share of a holiday home which we plan to purchase with other family members.
We’d like to do this within the next 3 years.
Had we started saving towards this two years ago when we thought ‘we can’t afford to save’, we would’ve already hit our goal and would be seeing a small return on our investment.
Why Invest in a S&S ISA?
A Stocks and Shares ISA is an account that allows you to invest in a wide range of investments such as individual shares, bonds, funds, exchange-traded funds and investment trusts.
Why is it worthwhile? Well, it’s tax efficient for one thing.
You can invest up to the current ISA annual allowance and you will not need to pay tax on any investment gains.
The ISA allowance for the 2019/20 tax year is £20,000, and you have until 5th April 2020 to use it.
The ‘use it or lose it’ deadline is quickly approaching, with only a month left to take advantage of the 2019/20 allowance.
With Fidelity, you can start saving from as little as £50 a month and there are thousands of funds and shares to invest your allowance in.
Fidelity offer expert guidance and have helpful tools on their website to help you make an informed choice.
You can access your ISA 24/7 online or via the app.
Other Ways to Find Money to Invest for the moments that matter
Track Your Spending
Tracking your daily spending is a great way to see exactly where your money is going.
You might think that there aren’t any areas of spending you can cut back on.
A spending diary might highlight to you just how much money you do fritter away on those small purchases you don’t notice.
Added together they could make a big difference!
Take Your Own Lunch
Maybe you don’t treat yourself to a takeaway coffee every day, but what about that £3 meal deal every lunchtime?
Take your own lunch and set the money you would spend aside to invest in your big money goals.
Review Your Fixed Expenses
If you’re sure there’s no fat to trim from your variable spending, take a look at your fixed expenses.
Quite often we forget to check in with our monthly direct debits – we just set them up and forget about it. But are you getting the best value for money?
Sell Your Belongings
The average UK home has over £3,000 worth of unused items according to eBay.
Make Extra Money
There are a plethora of ways out there that you can make extra money.
What little luxuries will you cut out to save for your big goals and invest for the moments that matter?