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  • FIRST POST
    • Peachie_
    • By Peachie_ 12th Jul 17, 11:13 AM
    • 2Posts
    • 1Thanks
    Peachie_
    Age 22, Saving
    • #1
    • 12th Jul 17, 11:13 AM
    Age 22, Saving 12th Jul 17 at 11:13 AM
    Hi,
    I have just turned 22 and have around £4,000 in savings. I have been working for a few years and didn't go to university so I don't have student debts. I earn just over £10,000 a year from 2 part time jobs. I think it's time to hardcore save for the future. I want to save to go to Australia as well as saving for a future house. I live with my parents so don't have many outgoings. How much do you think I should aim to save each month? Is £4000 a good starting point?
    Thanks
Page 1
    • eskbanker
    • By eskbanker 12th Jul 17, 11:44 AM
    • 5,008 Posts
    • 4,759 Thanks
    eskbanker
    • #2
    • 12th Jul 17, 11:44 AM
    • #2
    • 12th Jul 17, 11:44 AM
    £4,000 sounds a reasonable starting point, especially relative to £10,000 income, but it's impractical to give a figure for how much you should save without knowing the full picture of what commitments you have from your £800ish monthly wages, i.e. what's stopping you from saving it all?

    If you haven't already, it would be worth reading up on the two schemes available to assist first-time buyers, namely Help to Buy ISA and Lifetime ISA, where the government will boost your savings by 25%. Also worth reading the more general guide to which savings accounts are best and in particular the regular savers suited to those wanting to put aside money every month.

    What's the priority between getting onto the property ladder versus going to Australia, neither of which are cheap?!
    • Peachie_
    • By Peachie_ 12th Jul 17, 11:58 AM
    • 2 Posts
    • 1 Thanks
    Peachie_
    • #3
    • 12th Jul 17, 11:58 AM
    • #3
    • 12th Jul 17, 11:58 AM
    I pay my parents £108 for rent every month, around £35 for petrol and £40 for my phone bill. That's about all the outgoings I have. Australia is always a place I have wanted to visit and I have friends over there who I haven't seen in a very long time.
    • Eco Miser
    • By Eco Miser 12th Jul 17, 12:03 PM
    • 2,891 Posts
    • 2,680 Thanks
    Eco Miser
    • #4
    • 12th Jul 17, 12:03 PM
    • #4
    • 12th Jul 17, 12:03 PM
    So save £617 a month - and try to cut down the phone bill to save even more.
    Eco Miser
    Saving money for well over half a century
    • MatthewAinsworth
    • By MatthewAinsworth 12th Jul 17, 12:08 PM
    • 2,703 Posts
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    MatthewAinsworth
    • #5
    • 12th Jul 17, 12:08 PM
    • #5
    • 12th Jul 17, 12:08 PM
    Get your house deposit together before you even consider holidaying abroad, living with parents is a great saving opportunity. Bear in mind that you'll need a bigger income to even borrow enough for a 1 bed flat, check out mortgage affordability calculators

    Also look into investing, you're young so can afford to be aggressive (if there's a crash you have long enough to recover)
    • atush
    • By atush 12th Jul 17, 12:41 PM
    • 16,095 Posts
    • 9,802 Thanks
    atush
    • #6
    • 12th Jul 17, 12:41 PM
    • #6
    • 12th Jul 17, 12:41 PM
    Are you happy earning 10K a year with 2 PT jobs at 22?

    Or would you rather get a ful time job, with pension and maybe other benefits and earn more? You could save more and it looks better on your CV?
    • bigadaj
    • By bigadaj 12th Jul 17, 7:53 PM
    • 9,357 Posts
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    bigadaj
    • #7
    • 12th Jul 17, 7:53 PM
    • #7
    • 12th Jul 17, 7:53 PM
    Get your house deposit together before you even consider holidaying abroad, living with parents is a great saving opportunity. Bear in mind that you'll need a bigger income to even borrow enough for a 1 bed flat, check out mortgage affordability calculators

    Also look into investing, you're young so can afford to be aggressive (if there's a crash you have long enough to recover)
    Originally posted by MatthewAinsworth
    I'd disagree with much of that.

    One approach would be to save up enough to go to Australia, go over there for maybe a year and you'd qualify for a working holiday visa.

    You probably want to think about what you want to do in the longer term, and then how you will get qualifications and experience to do that and progress in a career.
    • justme111
    • By justme111 12th Jul 17, 9:15 PM
    • 2,700 Posts
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    justme111
    • #8
    • 12th Jul 17, 9:15 PM
    • #8
    • 12th Jul 17, 9:15 PM
    So your £108 a month includes food as well ? Basically you live for free as that £108 would barely cover food never mind utilities and accommodation. I would say do something about your career before considering buying a house as neither saving for deposit nor living independently is very viable or desirable with that sort of income. And travel as well for sure as once you paying proper rent/mortgage it would be more difficult. Resuming - forget about mortgage and house , concentrate on career, travel and saving all you can for travel/emergencies/just because. Ah, and I would have opened some kind of pension investment and put there at least something, £50 for example. Just to get into a habit of contributing to pension certain percentage of your income - now you would not miss those £50 while I the future they will make a difference.
    • MatthewAinsworth
    • By MatthewAinsworth 12th Jul 17, 9:48 PM
    • 2,703 Posts
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    MatthewAinsworth
    • #9
    • 12th Jul 17, 9:48 PM
    • #9
    • 12th Jul 17, 9:48 PM
    Go to australia and you'll be renting, with prices reflecting the jobs market there, then consider whether any flashy career is actually worth breaking your back and paying tax for, whether you would be able to build savings back up and buy over there

    Property (or shares) capital gains is far more tax favourable than work, get it while its cheaper
    But you wont get much mortgage on that income, at least go full time
    • Gadfium
    • By Gadfium 13th Jul 17, 7:15 AM
    • 609 Posts
    • 1,117 Thanks
    Gadfium
    Go to australia and you'll be renting, with prices reflecting the jobs market there, then consider whether any flashy career is actually worth breaking your back and paying tax for, whether you would be able to build savings back up and buy over there

    Property (or shares) capital gains is far more tax favourable than work, get it while its cheaper
    But you wont get much mortgage on that income, at least go full time
    Originally posted by MatthewAinsworth
    If the OP wouldn't get a mortgage on their income then how would they property or shares capital?
    And not all careers require you to "break your back".
    • MatthewAinsworth
    • By MatthewAinsworth 13th Jul 17, 10:31 AM
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    MatthewAinsworth
    A full time job on living wage should be attainable for him, and thatd be enough to buy a 1 bed leasehold flat, and he could invest on any level of income as long as he could save. Going abroad and renting there is quite an outlay, it ups the stakes. If he is underemployed now you really think he'll seriously push a career?
    • justme111
    • By justme111 13th Jul 17, 10:49 AM
    • 2,700 Posts
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    justme111
    Well by me it is better to be underemployed on minimal wage than work all hours under the sun on minimal wage ( obviously if one can make ends meet as op can due to being subsidised by parents) as in the latter case one has less space in their head , energy and time to think plan and qualify so that they don't have to work on minimal wage all their life. Btw op may be female .
    PS. Leasehold flat is the last option when there is no other alternative imo.
    • cashbackproblems
    • By cashbackproblems 13th Jul 17, 12:06 PM
    • 1,675 Posts
    • 640 Thanks
    cashbackproblems
    Go to australia and you'll be renting, with prices reflecting the jobs market there, then consider whether any flashy career is actually worth breaking your back and paying tax for, whether you would be able to build savings back up and buy over there

    Property (or shares) capital gains is far more tax favourable than work, get it while its cheaper
    But you wont get much mortgage on that income, at least go full time
    Originally posted by MatthewAinsworth

    what nonsense, property is peaked and most agree we are heading for a slow downturn. Either way its not cheap.


    OP would be better off training and looking to increase his income potential, going to Australia for work experience e.g. teaching would fit in well with that, and its a once in a lifetime experience you will regret not doing later on. Plus many people do not come back.


    Prices in Sydney/Melb are worse than London, but other areas like Queensland are a lot more reasonable
    • MatthewAinsworth
    • By MatthewAinsworth 13th Jul 17, 1:06 PM
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    MatthewAinsworth
    Virtually every year property is at a new peak, apart from the GFC from which it recovered as it always will. There are always naysayers, as with equities

    Are the opportunities in Australia so well paid that they completely negate the cost of travel and extra rent, and the opportunity cost if property does keep rising?
    • MatthewAinsworth
    • By MatthewAinsworth 13th Jul 17, 1:11 PM
    • 2,703 Posts
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    MatthewAinsworth
    Why do Asian people come to the UK when Australia is closer to then?
    • justme111
    • By justme111 13th Jul 17, 2:35 PM
    • 2,700 Posts
    • 2,598 Thanks
    justme111
    Virtually every year property is at a new peak, apart from the GFC from which it recovered as it always will. There are always naysayers, as with equities

    Are the opportunities in Australia so well paid that they completely negate the cost of travel and extra rent, and the opportunity cost if property does keep rising?
    Originally posted by MatthewAinsworth
    Really? One should not go to Australia when one is 22 and lives with parents because it would delay one's buying a leasehold flat?!
    Besides prices for flats are not growing the same as those for houses. In my area they are virtually the same as they were 6 years ago.
    • MatthewAinsworth
    • By MatthewAinsworth 13th Jul 17, 2:55 PM
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    MatthewAinsworth
    It's a step on the ladder from which you can upsize, if you don't save living with parents you'll have to rent even if in England, and once renting if you're on a low income you'll struggle severely to save a deposit
    • ringo_24601
    • By ringo_24601 13th Jul 17, 3:01 PM
    • 16,780 Posts
    • 27,222 Thanks
    ringo_24601
    It sounds like upping your income is more important than figuring out how much to save each month.

    Is it not worth spending some of those savings on training that will push your salary up?
    • cashbackproblems
    • By cashbackproblems 13th Jul 17, 3:35 PM
    • 1,675 Posts
    • 640 Thanks
    cashbackproblems
    Virtually every year property is at a new peak, apart from the GFC from which it recovered as it always will. There are always naysayers, as with equities

    Are the opportunities in Australia so well paid that they completely negate the cost of travel and extra rent, and the opportunity cost if property does keep rising?
    Originally posted by MatthewAinsworth

    I think people accept prices will not rise and most likely fall, tbe cycle has in recent times been disrupted due to QE and cheap credit and the 2008-9 crash was short lived. This is not to say you shouldn't buy (I just did) but there is no harm in watching the market if you are 22 and earning peanuts
    • MatthewAinsworth
    • By MatthewAinsworth 13th Jul 17, 4:10 PM
    • 2,703 Posts
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    MatthewAinsworth
    Possibly, investing instead may make more sense except you can't leverage it easily, but at least the deposit would keep up
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