"Smarter" Saving - 1st Time House Buying
Discussion
Set the scene: Been with the Mrs for 10 years, got engaged 2 years ago. Figured we wouldn't get married until we had bought a house as it seems like a bit of a waste of savings (1 day of fun vs a lifetime of security).
So, every month we both put away as much as we can afford (a reasonable amount for me as I earn a bit more). However, because of one thing or another, we end up having to "dip" into savings to pay for odd one off things such as car insurance, contents insurance etc so we don't seem to be getting anywhere fast.
We set ourselves a bit of a goal last autumn of getting into our own place by the time I'm 30 (Sept 2016) but it doesn't feel like we have made a dent at all.
I have a 1k balance on a credit card, a remaining 3k on a fixed term loan from the car and spend £50-60pm on 0% interest.
I have a mental conflict which is telling me to concentrate on paying off the credit card and loan 1st, then put the money I would have been paying on these into savings. But then I don't know which would mean more in the savings more quickly (hope that makes sense).
My dad has always told me that my money is better off in my account rather than the banks so paying stuff off bit by bit seems a bit backwards.
Savings is stored in a low rate interest savings account, I don't have an ISA or anything like that as there are occasions that I may need access to my savings for bits and pieces.
I think we need a better plan of attack, just not sure what way to attack from!
Any help / advice / opinion / motivation +ve or -ve appreciated!
So, every month we both put away as much as we can afford (a reasonable amount for me as I earn a bit more). However, because of one thing or another, we end up having to "dip" into savings to pay for odd one off things such as car insurance, contents insurance etc so we don't seem to be getting anywhere fast.
We set ourselves a bit of a goal last autumn of getting into our own place by the time I'm 30 (Sept 2016) but it doesn't feel like we have made a dent at all.
I have a 1k balance on a credit card, a remaining 3k on a fixed term loan from the car and spend £50-60pm on 0% interest.
I have a mental conflict which is telling me to concentrate on paying off the credit card and loan 1st, then put the money I would have been paying on these into savings. But then I don't know which would mean more in the savings more quickly (hope that makes sense).
My dad has always told me that my money is better off in my account rather than the banks so paying stuff off bit by bit seems a bit backwards.
Savings is stored in a low rate interest savings account, I don't have an ISA or anything like that as there are occasions that I may need access to my savings for bits and pieces.
I think we need a better plan of attack, just not sure what way to attack from!
Any help / advice / opinion / motivation +ve or -ve appreciated!
jonah35 said:
The key is to earn more not spend less.
Work harder, longer or get more qualified.
Yup.Work harder, longer or get more qualified.
Me and the OH are saving, fortunately I've managed to get a promotion with a ~40% pay increase.
That all goes into Savings and I don't have to change my spending pattern.
Getting more money in (if you can), is the best way forward.
Pay off any outstanding debts on loans which you are paying interest on as soon as possible. If this means eradicating your savings so be it.
Can you somehow pay the loan off with a 0% credit card??
If you are dipping into savings to pay for regular stuff, they are not really savings - thus building up a deposit for a house will happen really slowly.
If you are really serious about the 2016 deadline - I suggest dramatic things need to happen. Take a real close look at outgoings -takeaways, meals out, weekly shop. Have you changed energy supplier recently? Can you cycle to work rather than drive etc. etc. etc. It is all mundane and trotted out on forums/ consumer programmes regularly - but it can make a real difference to your 'bottom line'.
We have just made some fairly life changing decisions and need to dramatically cut back on the lifestyle we had. It really is amazing how much can be saved without too much sacrifice - in fact scarily so!!
Good luck....
Mike
Can you somehow pay the loan off with a 0% credit card??
If you are dipping into savings to pay for regular stuff, they are not really savings - thus building up a deposit for a house will happen really slowly.
If you are really serious about the 2016 deadline - I suggest dramatic things need to happen. Take a real close look at outgoings -takeaways, meals out, weekly shop. Have you changed energy supplier recently? Can you cycle to work rather than drive etc. etc. etc. It is all mundane and trotted out on forums/ consumer programmes regularly - but it can make a real difference to your 'bottom line'.
We have just made some fairly life changing decisions and need to dramatically cut back on the lifestyle we had. It really is amazing how much can be saved without too much sacrifice - in fact scarily so!!
Good luck....
Mike
Cheers all.. been reading up over on money savings website this eve.
Job wise, I'm earning more than I would expect in my sector and for my age and experience.. wider experiences and skills are coming but a way off for a while.
I'd just like to give myself the best (or a better) start if that makes sense.
When I say we "dip" into savings, its only on 1 off occasions and is always "paid back" as soon as possible.. almost like borrowing from myself instead of putting anything else on credit.
Agreed with paying off credit 1st, plan to clear everything on payday.
(There is a really good example of why here -http://www.moneysavingexpert.com/savings/pay-off-debts).
I guess its the lifestyle we struggle with.
I'm a stickler for keeping things cheap, but we both have hobbies / interests that will have to take a backseat for the time being - geting the balance between a comfortable lifestyle and saving enough seems to be the hard bit.
We generally dont spend much, although with my dads 70th just gone and a big family xmas it just seems to have stopped us dead - its time to get back on track.
Job wise, I'm earning more than I would expect in my sector and for my age and experience.. wider experiences and skills are coming but a way off for a while.
I'd just like to give myself the best (or a better) start if that makes sense.
When I say we "dip" into savings, its only on 1 off occasions and is always "paid back" as soon as possible.. almost like borrowing from myself instead of putting anything else on credit.
Agreed with paying off credit 1st, plan to clear everything on payday.
(There is a really good example of why here -http://www.moneysavingexpert.com/savings/pay-off-debts).
I guess its the lifestyle we struggle with.
I'm a stickler for keeping things cheap, but we both have hobbies / interests that will have to take a backseat for the time being - geting the balance between a comfortable lifestyle and saving enough seems to be the hard bit.
We generally dont spend much, although with my dads 70th just gone and a big family xmas it just seems to have stopped us dead - its time to get back on track.
Budgeting is the key - and from your post (insurance as an unexpected expense) it sounds like you aren't doing it properly.
Take the time to work out exactly how much you need to spend from month to month (pro rata for things like insurance and road tax which are only once a year but you know about them), and then you'll have a better idea about whether you do really need to dial back on hobbies.
Definitely pay off all the loans in full as quickly as possible - the interest on them is far higher than you'll get on any "safe" savings account.
In terms of saving, I'd put about a month's worth of salary into an instant access account, and then anything over and above that into an ISA. You can go for an instant access ISA if you like, which will make it easier to get hold of the money, but if you plan properly then you should be able to lock it up for a longer period and get a much better rate.
Take the time to work out exactly how much you need to spend from month to month (pro rata for things like insurance and road tax which are only once a year but you know about them), and then you'll have a better idea about whether you do really need to dial back on hobbies.
Definitely pay off all the loans in full as quickly as possible - the interest on them is far higher than you'll get on any "safe" savings account.
In terms of saving, I'd put about a month's worth of salary into an instant access account, and then anything over and above that into an ISA. You can go for an instant access ISA if you like, which will make it easier to get hold of the money, but if you plan properly then you should be able to lock it up for a longer period and get a much better rate.
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