Finance advice for a 22 year old
Discussion
Alright, i've been lurking around for a fair while now and in particular this finance section. Basically I'm just looking for a bit of advice on what to do with my money... I've never been the best at saving and now at the fresh young age of 22 and while still living at home, have decided it's time to start... So, here goes...
Current wage: £42.5k(+overtime) before tax and national insurance.
Monthly bills (car+running costs, keep, phone, gym, insurance and subscriptions):£691
Usually spend around £400 per month socially with friends, girlfriend etc. and dont really spend money on clothes/shoes/gadgets.
I already pay into a pension scheme (£60p/m) and buy company shares(£50p/m) that are in a 3 year scheme.
Take home roughly £2500 as a basic wage and can make that up to £2900-£3000 per month with some overtime.
Looking for advice/ideas on what to do with my remaining cash. I know the usual 'stick money away in a bank account somewhere' advice but am looking to see if the financially savvy on here can educate me briefly in better options!
Cheers,
M94
Current wage: £42.5k(+overtime) before tax and national insurance.
Monthly bills (car+running costs, keep, phone, gym, insurance and subscriptions):£691
Usually spend around £400 per month socially with friends, girlfriend etc. and dont really spend money on clothes/shoes/gadgets.
I already pay into a pension scheme (£60p/m) and buy company shares(£50p/m) that are in a 3 year scheme.
Take home roughly £2500 as a basic wage and can make that up to £2900-£3000 per month with some overtime.
Looking for advice/ideas on what to do with my remaining cash. I know the usual 'stick money away in a bank account somewhere' advice but am looking to see if the financially savvy on here can educate me briefly in better options!
Cheers,
M94
Edited by M94 on Saturday 17th September 00:53
Edited by M94 on Saturday 17th September 00:57
BJG1 said:
M94 said:
I get it easy at home. Cooking, cleaning, ironing etc. Is all done for me. I wanna get myself a decent house when I move out therefore I'm in no rush. I don't wanna be paying a mortgage for something that I'm not happy in.
Eurgh, f
k my generation. Wacky Racer said:
johnfm said:
M94 said:
Appreciating all the replies, all really helpful advice.
Looking to move out in the next 2/3 years.
A few have asked where the money has all gone so far. I've just paid off a holiday which has taken a fair chunk of it.
You must have VERY understanding or clingy parents. £42k+/year and living at home does not compute (and neither does such a small pension contribution).Looking to move out in the next 2/3 years.
A few have asked where the money has all gone so far. I've just paid off a holiday which has taken a fair chunk of it.
Sounds like you're doing pretty well though,.
Everybody is different, if you want to move out at seventeen fine, twenty seven is fine too.
All (imho)
I bring no trouble to my parents door nor do I give them any hassle. They don't have to be very understanding or clingy to have no problems with me at home at 22.
JulianPH said:
You earn almost double the national average. That is the first thing you should be proud of (and well done!!)
Stay with your parents as long as you like (but understand they will want their space back as mush as you want your space moving forward).
Save everything you can whilst living with your parents. If you have any money left over at the end of the month then save it.
Use a mixture of cash and Stocks & Shares ISA, These cost nothing and save tax.
Also consider a SIPP/Pension for long term savings. as these offer even better tax treatment.
My general advice would be to imagine you are on half the salary you are, and save the rest. This way you can't go wrong. The plus side is there will always be money there for you if the future is not kind.
Julian
Thanks for taking the time to write this Julian. Gonna have a look into a SIPP.Stay with your parents as long as you like (but understand they will want their space back as mush as you want your space moving forward).
Save everything you can whilst living with your parents. If you have any money left over at the end of the month then save it.
Use a mixture of cash and Stocks & Shares ISA, These cost nothing and save tax.
Also consider a SIPP/Pension for long term savings. as these offer even better tax treatment.
My general advice would be to imagine you are on half the salary you are, and save the rest. This way you can't go wrong. The plus side is there will always be money there for you if the future is not kind.
Julian
Classy6 said:
Remember having the same thoughts myself at a similar age, albeit a few years on.
I moved out at 26, on the basis I was working a lot of shifts and had dollar signs in my eyes resulting in me not seeing the Mrs that much. At this point it was appropriate for us then to have our own space as it wasn't exactly feasible her coming over at 10pm+ or vice versa. Had this not been the case, I would of stayed at home for as long as possible to save up as much of a deposit as I could, which I had already taken advantage of years prior... just maybe would of liked a few years more!
Don't feel pressured to move out until you're ready (unless parents are pushing, legitimate reason) especially don't move out to rent. As it's been said, you're in a fantastic position on your wage at your age, take FULL advantage of it and use it to make hay and get ahead.
Make the most of living at home, scrimp & save as much as you can and budget to make sure you're saving a set amount of cash per month. Cut down on silly outgoings, impulse purchases. Budget allocate for monthly expenditure and then trim the fat off monthly payments (find a cheaper phone contracts, subscriptions, insurance etc) Consolidate/pay off any loans/credit cards and in general minimise spending whilst enjoying life and still getting hammered at the weekends (contradiction - not included with silly expenses). Work at it until it becomes addictive to see the cash piling up. It's easier when you have a goal/figure in mind so set one and aim for it.
In your situation I would be fully focused on a deposit for a house right now in the short term. A house is an appreciating long term asset that eventually you'll need so it pays dividends to start saving for what will be the biggest purchase you'll ever make. The larger amount you can save up, the smaller your mortgage payments are going to be/bigger house you'll be able to afford. If you're sensible when purchasing said house it will allow you to continue to live the life you do now. I.e Half decent car, meals out, holidays, clothes etc, along with being able to kit it out/renovate to your tastes. A lot of people find that when they do get on the ladder they then struggle to do much else due to the vast difference in 'living costs' and/or mortgage payments that you don't have to worry about when living at home.
During my deposit saving stage I just hoarded money in a 123 account and made use of the other high interest accounts around at the time, lloyds and TSB etc. Interest paid wasn't huge but short term I didn't really want to be messing about in shares. I think this was enforced to me by the famous fund manager Peter Lynch who said don't invest in stocks until you have a house.
Once you're in the house, your saving habits change drastically. You're now looking to a more long term goal. Use the money you were using to save for a deposit to either max/heavily contribute to a stocks/shares ISA, max out any company shares in the share scheme (if the deals good) and pension contributions (again, if the deals good). Keep some cash back every month for a safety net and if you've got anything left over or interest rates start climbing back up, look at starting to overpay the mortgage to reduce the term.
Obviously this last bit goes down the st pan if you then decide after your settled in your house that you the only thing you're missing is a V8 on the drive and life's too short & that saving can go on hold for a few years 
My 2p - Good Luck Pal
Loving this one! Might get it printed onto a canvas and stick it above my bed so I can read it over and over again every night/morning. I work two shifts and don't see the Mrs that often either. Sounds very similar!I moved out at 26, on the basis I was working a lot of shifts and had dollar signs in my eyes resulting in me not seeing the Mrs that much. At this point it was appropriate for us then to have our own space as it wasn't exactly feasible her coming over at 10pm+ or vice versa. Had this not been the case, I would of stayed at home for as long as possible to save up as much of a deposit as I could, which I had already taken advantage of years prior... just maybe would of liked a few years more!
Don't feel pressured to move out until you're ready (unless parents are pushing, legitimate reason) especially don't move out to rent. As it's been said, you're in a fantastic position on your wage at your age, take FULL advantage of it and use it to make hay and get ahead.
Make the most of living at home, scrimp & save as much as you can and budget to make sure you're saving a set amount of cash per month. Cut down on silly outgoings, impulse purchases. Budget allocate for monthly expenditure and then trim the fat off monthly payments (find a cheaper phone contracts, subscriptions, insurance etc) Consolidate/pay off any loans/credit cards and in general minimise spending whilst enjoying life and still getting hammered at the weekends (contradiction - not included with silly expenses). Work at it until it becomes addictive to see the cash piling up. It's easier when you have a goal/figure in mind so set one and aim for it.
In your situation I would be fully focused on a deposit for a house right now in the short term. A house is an appreciating long term asset that eventually you'll need so it pays dividends to start saving for what will be the biggest purchase you'll ever make. The larger amount you can save up, the smaller your mortgage payments are going to be/bigger house you'll be able to afford. If you're sensible when purchasing said house it will allow you to continue to live the life you do now. I.e Half decent car, meals out, holidays, clothes etc, along with being able to kit it out/renovate to your tastes. A lot of people find that when they do get on the ladder they then struggle to do much else due to the vast difference in 'living costs' and/or mortgage payments that you don't have to worry about when living at home.
During my deposit saving stage I just hoarded money in a 123 account and made use of the other high interest accounts around at the time, lloyds and TSB etc. Interest paid wasn't huge but short term I didn't really want to be messing about in shares. I think this was enforced to me by the famous fund manager Peter Lynch who said don't invest in stocks until you have a house.
Once you're in the house, your saving habits change drastically. You're now looking to a more long term goal. Use the money you were using to save for a deposit to either max/heavily contribute to a stocks/shares ISA, max out any company shares in the share scheme (if the deals good) and pension contributions (again, if the deals good). Keep some cash back every month for a safety net and if you've got anything left over or interest rates start climbing back up, look at starting to overpay the mortgage to reduce the term.
Obviously this last bit goes down the s
t pan if you then decide after your settled in your house that you the only thing you're missing is a V8 on the drive and life's too short & that saving can go on hold for a few years My 2p - Good Luck Pal
Thanks for this mate
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