Saving £30k in 2 years
Discussion
Wife and I are looking to save £30k between mid 2021 and mid 2023 to allow us to move house (cost of SDLT, legal fees, moving fees, and a bit of a general slush fund).
I know it's peanuts compared to a lot of what's discussed on here - we are sadly not powerfully built company directors - but I'd really appreciate any steer on the best vehicle to save this sum.
We would require reasonable access (30 days maybe?) to the savings in case of emergency but not instant, we have large credit available to us that could be used to tide us over in emergency circumstances.
Of course we could just overpay the current mortgage and then fund all the costs of moving out of the increased equity when we sell, but at 1.2% or whatever it is there may be better options.
Any advice appreciated.
I know it's peanuts compared to a lot of what's discussed on here - we are sadly not powerfully built company directors - but I'd really appreciate any steer on the best vehicle to save this sum.
We would require reasonable access (30 days maybe?) to the savings in case of emergency but not instant, we have large credit available to us that could be used to tide us over in emergency circumstances.
Of course we could just overpay the current mortgage and then fund all the costs of moving out of the increased equity when we sell, but at 1.2% or whatever it is there may be better options.
Any advice appreciated.
Start saving now and give yourself an extra year?
Also, unless you are desperately in love with the job you have now, there is likely a similar job, or better, that pays more. The best way to have more money is to earn more. I know right now isn’t the best time to start looking but you could research possibilities and enroll in on line classes to close any skills gap.
Also, unless you are desperately in love with the job you have now, there is likely a similar job, or better, that pays more. The best way to have more money is to earn more. I know right now isn’t the best time to start looking but you could research possibilities and enroll in on line classes to close any skills gap.
As other poster said why wait give yourself 3 years instead of 2 and you’ll still hit the date you’ve targeted.
Next is to review your current spending and create a budget. You might find that you can comfortably meet the challenge or conversely simply no way given current income or your willingness to reduce spend.
You have to be realistic with a budget but creating one and then sticking to it/managing yourself against it is key. It’s in some ways a bit like a diet hard to do but you need to focus on it.
Next is to review your current spending and create a budget. You might find that you can comfortably meet the challenge or conversely simply no way given current income or your willingness to reduce spend.
You have to be realistic with a budget but creating one and then sticking to it/managing yourself against it is key. It’s in some ways a bit like a diet hard to do but you need to focus on it.
OriginalFDM said:
Wife and I are looking to save £30k between mid 2021 and mid 2023.......Any advice appreciated.
You'll have to take a view because it's not for everyone but......All money coming in get's saved, all spending is done on credit cards. As long as you both understand the money isn't yours and you can't go on a spending spree with it, it works out ok. You need a small float to pay each card's DD each month and you must not miss any payments ever. When you get near your goal start paying off a little off the cards but still make sure bulk of income money goes into savings. I'm just turning from saving everything to paying off everything and I pay the DD per card and then the interest payment again so the debt starts to drop. Then when balance down to something simple, wash, rinse and repeat. It works for us......
You won't be able to get a decent return on any investment without obviously putting in some risk.
It all depends on how much you earn, if you're able to put away £750-1k a month, you can obviously do it, but if you can't, then you won't. Best thing to do is to cut everything out, all non-essential bills, the money soon stacks up (it's what I've been doing for the past 6 months).
It all depends on how much you earn, if you're able to put away £750-1k a month, you can obviously do it, but if you can't, then you won't. Best thing to do is to cut everything out, all non-essential bills, the money soon stacks up (it's what I've been doing for the past 6 months).
Sorry wasn’t very clear on objectives in short term. We are already home owners, looking to upsize/nicer area and are well versed in cutting down all unnecessary spending having done it 5 years ago to buy our first house and not ever really got out of the mindset.
Going on a big anniversary holiday next year and currently saving for that, hence not in a position to start saving for the house fund til c. March/April next year.
Remortgage is due around the same time so plan is to do another 2 years here and use that 2 years to save the fund for the big move.
We can currently put away c. £1500/mo between us when we’re very religious with not spending unnecessarily. But that’s accounted for until Q2 of next year to fund the holiday. When a car loan finishes in 22 that’ll be closer to £2k/m with my (guaranteed) pay rise.
Looking at going from house worth c. £290k to £425-450kish so idea was to have a cash lump to pay all the moving expenses and use every bit of equity for the deposit on new place
Going on a big anniversary holiday next year and currently saving for that, hence not in a position to start saving for the house fund til c. March/April next year.
Remortgage is due around the same time so plan is to do another 2 years here and use that 2 years to save the fund for the big move.
We can currently put away c. £1500/mo between us when we’re very religious with not spending unnecessarily. But that’s accounted for until Q2 of next year to fund the holiday. When a car loan finishes in 22 that’ll be closer to £2k/m with my (guaranteed) pay rise.
Looking at going from house worth c. £290k to £425-450kish so idea was to have a cash lump to pay all the moving expenses and use every bit of equity for the deposit on new place
OriginalFDM said:
Going on a big anniversary holiday next year and currently saving for that, hence not in a position to start saving for the house fund til c. March/April next year.
If you take the right credit cards out i.e.Amex you could cut the cost of that holiday down significantly by using the reward points, special airline discounts and offers on general spend. You could start saving earlier rather than later.Julia121 said:
OriginalFDM said:
Going on a big anniversary holiday next year and currently saving for that, hence not in a position to start saving for the house fund til c. March/April next year.
If you take the right credit cards out i.e.Amex you could cut the cost of that holiday down significantly by using the reward points, special airline discounts and offers on general spend. You could start saving earlier rather than later.Given the relatively short term timescale and low interest rates I'm considering just buying £1500-£1800 of premium bonds each month
rockin said:
In the time frame it's not IMO worth running any investment risk at all. I'd just pay down your existing mortgage as quickly as possible.
That was kind of my first thought but then thought that if it was kept separate, at least we would then have the choice when it came to moving time as to whether to sink it into the deposit or hold some back, ie if we liked a place that needed a new kitchen or whatever. I guess it’s all much of a muchness with the interest rates and timeframes involved. Can you get your current mortgage down to 60% LTV by the renewal date next year? If so, then that opens up lots of cheap options for the 2 year period after that, which will help hit your target. It could save a few hundred a month on mortgage interest depending on how big your mortgage is at the moment.
If possible, then I'd be overpaying your mortgage to get to the 60% mark, then you can re-evaluate saving options from that point.
If possible, then I'd be overpaying your mortgage to get to the 60% mark, then you can re-evaluate saving options from that point.
Julia121 said:
You'll have to take a view because it's not for everyone but......
All money coming in get's saved, all spending is done on credit cards. As long as you both understand the money isn't yours and you can't go on a spending spree with it, it works out ok. You need a small float to pay each card's DD each month and you must not miss any payments ever. When you get near your goal start paying off a little off the cards but still make sure bulk of income money goes into savings. I'm just turning from saving everything to paying off everything and I pay the DD per card and then the interest payment again so the debt starts to drop. Then when balance down to something simple, wash, rinse and repeat. It works for us......
So the OP ends up with 30k in savings earning sod all and 30k of credit card debt costing a fortune or part thereof.All money coming in get's saved, all spending is done on credit cards. As long as you both understand the money isn't yours and you can't go on a spending spree with it, it works out ok. You need a small float to pay each card's DD each month and you must not miss any payments ever. When you get near your goal start paying off a little off the cards but still make sure bulk of income money goes into savings. I'm just turning from saving everything to paying off everything and I pay the DD per card and then the interest payment again so the debt starts to drop. Then when balance down to something simple, wash, rinse and repeat. It works for us......
How's that going to work when his mortgage company do their affordability checks?
eliot said:
So the OP ends up with 30k in savings earning sod all and 30k of credit card debt costing a fortune or part thereof.
How's that going to work when his mortgage company do their affordability checks?
Op says they want it as a lump sum for costs associated with moving although that figure may benefit by being a bit tighter perhaps. OP's goal doesn't seem to be to gain interest although it would be nice to have.How's that going to work when his mortgage company do their affordability checks?
Regarding the debt it's the goal that count. Many people are just not able to continue saving after the initial euphoria and good intentions have worn off after a few months. There's no feedback apart from the occasional statement and many savings accounts don't even provide that. Human beings being human need regular feedback to keep them motivated. Credit card providers are brilliant at this by supplying continual motivation to get the debt down. The interest you pay is your dues to them to keep you motivated.
Well you've already passed the affordability checks by the credit cards suppliers. At the end you also have a history of showing what you can afford and payment history. Just get the debt down to around 30-20% before applying. Done properly debt follows a bell curve shape. If your broker can't get a mortgage deal for that then get another broker.
Xaero said:
Can you get your current mortgage down to 60% LTV by the renewal date next year? If so, then that opens up lots of cheap options for the 2 year period after that, which will help hit your target. It could save a few hundred a month on mortgage interest depending on how big your mortgage is at the moment.
If possible, then I'd be overpaying your mortgage to get to the 60% mark, then you can re-evaluate saving options from that point.
Don’t think that’s doable to be honest, based on current repayments it’ll be ~70% at renewalIf possible, then I'd be overpaying your mortgage to get to the 60% mark, then you can re-evaluate saving options from that point.
Looking at rates though would only make around 0.1% difference so over two years very little real difference, current repayment is pretty small
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