FTB to be! would like some advice on saving!

happytails

Hi all, first off, sorry if its in the wrong place.

Right, we have zero savings at the moment but have paid off all our debts and just have our £700 overdraft to pay off. We are currently renting and paying £480 a month for a 3 bed end terrace. We have 3 large dogs and a baby due in Feb so would be looking for a house this size, preferably with a back garden and a driveway (and if we are really lucky a garage too!)

We are aiming to be able to save a fair amount by this time next year, looking at the prices dropping i am thinking this would be a good time - please correct me if wrong.

I will be out of work this year after having the baby and might be able to get a p/t job from Summer. DP is on £22k but job isnt very secure so is looking for another. We dont have a good credit rating as we've gone over our agreed overdraft limit a few times this year, were fine for 6 months and then united utilities took money out a day early this month and we got charged :mad: they said they'd informed us but it was 12 months ago (so our fault :mad:)

So the advice i need is....

How do i save up (useless) and what is an optimistic target? - Also is an ISA the best place to put the money?

And how do i increase my credit rating to give us a better chance?

Sorry ive rambled on, hope someone can help me

Sarah
xxx

Lokolo

Go by % of your income. A lot of people on the DFW board (debt free wannabe, I am sure you have been there if you have been paying off debts), tend to go for the Live off £4k a year thing. Basically after tax and rent, you have £4k to live off for the whole year.

Now its very hard to do this if you haven't been doing this before.

Ok so £22k. Means you take home £1,400 a month? (I am not including pension here)

£500 for sakes on rent, that means £900 a month. You can live off about £100 on food (2 of you + baby), £800. + expenses such as petrol, bills - this really depends how much you spend on these.

Sort out a budget, and stick to it. You could most probably save £300/£400 a month.

You want to save the maximum really. Save the max means you have less mortgage, therefore less debt.

Yes ISAs are good, you can put £3600 per tax year per person. However if you have more than this, as you are not working (therefore not paying tax) you can get tax free interest (google a R85 form) anyway, which is what an ISA gives you. But obviously when you start working again you h ave to start paying tax.

opinions4u

Save as much as possible without tipping yourselves over the edge. Ideally you want a minimum of 10% deposit, but may need more if your credit history is not so clever.

Regular Saver accounts and ISAs are probably the things to look at. Regular Savers ideal if you're looking more than a year ahead. Barclays and Halifax are good payers on these.

On £22k you are probably looking at a mortgage of £75k-£90k plus deposit for your house. Check out www.rightmove.co.uk to see if prices locally are realistic.

Whatver you do, I suggest you firstly get out of overdraft and make a pact with your other half that you never go below a certain amount in your current account (e.g. £500) and never need an overdraft again. Reason being, if a direct debit does go early you will always have the money there - this will help strengthen your credit rating and your relationship with your bank. Do this before you save.

apt

You really need to control your spending, because if you can't save now it's going to be even harder to balance the books with a baby and you not working. I doubt you'd get a mortgage in the near future, but you would be be well advised to rent for the next for 4 or 5 years to get together the minimum of £20,000-£30,000 you'll need for a deposit and to meet the costs of buying a house. It's better to make sure you can save and afford a mortgage rather than trying to catch the bottom of the market without adequate savings and on the basis of an insecure job. The Barclay's Monthly Saver (7.75% fixed for one year) might be a good place to get the savings habit (register for gross interest if you're not working), but get rid of your overdraft first.

[Deleted User]

Hi,

I'm saving for a house deposit too . Personally I fill up my ISA each year (fixed rate) and set up a 12 month regular saver which then fills up most of next years ISA when April comes around again. I've also got a high interest (or was until the interest rate cut ) savings account.

1. Generally ISA's are a good place to start:

http://www.moneysavingexpert.com/sav...gs-without-tax
and http://forums.moneysavingexpert.com/....html?t=401374

2. Regular savings accounts are good too:

http://www.moneysavingexpert.com/sav...vings-accounts
and http://forums.moneysavingexpert.com/....html?t=608697

Regular savings accounts are generally a good place for new money e.g. monthly pay cheques, however if for example you have £3k in a 6% high-interest bank account drip-feeding into a 10% regular savings account then you're essentially getting 8% interest on average for your £3k which beats most fixed rate products - albeit with a bit more work.

3. If you want something with a little less work then fixed rate savings accounts are a good option:

http://www.moneysavingexpert.com/sav...interest#fixed
and http://www.thisismoney.co.uk/saving-...&in_page_id=50

4. One other thing you might like to consider is getting a decent instant access savings account:

http://www.moneysavingexpert.com/sav...st#topaccounts
and http://www.thisismoney.co.uk/saving-...&in_page_id=50