Needing an IFA or just a good Google?

[romeogolf]

My partner and I recently bought a house and in the next few months I'm moving to a new job. We're both in our mid-late 20s (he's 25, I'm 28) and it's starting to raise the prospect of "are we planning correctly?"

I can easily give a brief summary of our financial situation here, but I'm not sure if this is the kind of thing that a good Google search or a post on a forum like this can answer for us, or if we really need to sit down with a professional. We don't know what our goals would be or should be, or if we need to make changes from our current situation.

How did you decide on your current financial plans? If you're of our parent's generation (born in the 60s) what advice would you give to us now?

Can post details here if relevant, but don't want this to come across as willy-waving for the sake of it.

[romeogolf]

Craikeybaby said:

I'm a few years older than you (mid thirties), once I had bought my house my next priority was getting a pension set up. It is better to start is earlier. I also started a rainy day fund, to cope with any work that needed done to the house.

Thanks. Yeah, we both have pensions with 5% of salary being contributed monthly and matched by our respective employers. He started his earlier this year, but mine's been open for 3 years now.

[romeogolf]

jonny70 said:

I would post the details here ( and you will get advice from financial advisors / financially astute members ( it's not willy waving other members have their financials when asking for advice and it's forum where there's plenty of people with 100k + cars )

Plenty members on here are knowledgable in all aspects of personal finance from BTL's (IFA's don't tend to give advice in btl ) to pensions etc
Ask away ...

Cheers... We do alright for our ages but you're right that there's obviously a broad spectrum here so hopefully this is seen as factual rather than boastful.

So we've got a combined income of £71,500 which is just under £4000/month after tax, student loans and pension contributions. We also rent out a room in the house and get £450/month from that.

The mortgage is £1150/month and then with various other bits and pieces like 2 x phone contracts (£77/month combined), a joint gym membership (£64), and the payment on the car (£410) and all other bills we've got just over £2100 disposable. We cleared out our savings to buy our home and currently have £250 in the savings account after having it redecorated.

I own two BTL flats with my brother on an agreed 50-50 basis - although they are both in my name entirely the initial deposit was an inheritance we both received. Approx LTV of 65% across the two. The smaller one was a 50% mortgage on a 14-year repayment, the bigger one is a 75% mortgage on interest-only. I had stty advice in the past (and perhaps a lack of advice, too) and fixed this larger one for 5 years at a stupid rate of 3.94%. Ideally, I'd like to reduce the LTV across them both to 50% when the 5 years are up in December 2020 through an increase in values and a moderate mortgage increase on the smaller flat. At the same time, would like to have both on repayment mortgages. At the moment, total mortgage payments are about £940 with rental income of £1650. The £700 seems to get eaten quickly by repairs, but they're not currently making a loss so I'm not too worried. At some point in the next 3-5 years I expect my brother might want to sell one of these to release a deposit for him to buy his own home as he currently rents, but he's a little nomadic and moves around a lot which is part of the reason we bought the second flat rather than him 'settling'.

The "what do we want" and "what we need to plan for" list is, in rough priority order...

> New living room furniture [by December this year] - £5k?
> New Kitchen [In 2018] - £10k?
> 2 x new bathrooms [By end of 2019] - £xx?
> PCP on car ends in September 2019. Will need a replacement whether new or used.
...
> Have a 3-month slush fund saved in case of emergencies. Other half is tempted to go freelance and this would help. He is currently the main earner but I'm slowly closing the gap.
...
> Get married and not have to scrimp on the costs / One of us will actually need to ask first, but it's gonna happen!
...
> Retire in our 60s without worrying about cash flow

So, yeah, any pointers or words of wisdom for two apparent adults who still feel like 16-year-olds would be great.

[romeogolf]

Teebs said:

With those committed outgoings, I would start to build up a good savings/emergency pot asap. £250 won't get you very far.

Yes, this is definitely something we're heading for. Before we bought the house we'd saved around £20k so we know it's feasible, it just takes time.

[romeogolf]

Thanks for the advice so far guys. Other half and I sat down at the weekend to look at replies and options available to us.

We've increased our mortgage payment by £100/month to start paying it down. This will reduce it to 90% LTV by the end of year 2 assuming a 3% increase in the property value.

I'm looking at putting £50/month into an S&S ISA although the sheer scope of options is baffling. I am concerned about the fact that with this option you could lose everything. How "real" is this risk? As in, if I'm cautious with my options, is it particularly likely? Or would that be hugely unlucky?

We round our salaries down to the nearest £100 each month and put this sum into our joint account (holding back the balance for our own treats). We've set up a standing order to another bank account for 10% of the joint fund contributions (£425/month) to build a slush fund over the next two years.

The PCP on my car is 4.9% APR. Is it worth making some overpayments here, or just leaving it to run to the end of the term? Final payment is about £10,500 in Sept 2019 and I only put a £1500 deposit down to start with so the payments are higher than they "need" to be, but I'm not sure if the overpayment would save enough to balance out not having as much of a slush fund.