how much should i be saving (not including pension)

savingpennies

DH and I aim for 10% of our gross income a year. We've both done this since before we got married and carried on the habit. I've read The Millionaire Next Door and like the ideas especially the one that says pay yourself first. The 10% goes out as soon as our salaries goes in so we don't miss it.

jon3001

Lokolo wrote: »

Because my plans are to save £65k until I am 25 (by then I will hopefully be earning £30k) and then use it as a house deposit. What you are saying is in doing so is idiotic (becoming a UAW).

I'm not saying you're idiotic. I'm saying someone with a PAW-mentality would probably approach things differently.

If the £65K is to secure a bargain in a deeply-depressed market then that's one thing. If it's a simple deposit then a PAW would be looking at the what makes the best return on their money. Given that mortgage borrowing is among the cheapest there is then a more aggressive option would be to put down the minimum deposit on a house that's well within their means and pay it off interest-only. They'd gain the maximum benefit from gearing and the excess cash could be invested in their portfolio for the long-term.

When they want to switch their investment strategy from accumulation to income then maybe they'd pay their mortgage off in one go at the end and enjoy the lower outgoings.

The book indicates that most PAWs borrowed 2x their income for their mortgage.

Do what you're comfortable with.

Lokolo

Hm ok I see what you mean.

I've got 5 years before that anyway keep saving for my PAW status then blow it all on black