What would you do in my situation?

JimLad

Hey Folks,

Its the new year so i thought it was time for an overview of my finances and to see if i could do better.

I am currently 22 and single living with my parents. They charge me £150 a month board and lodgings, but that is all inclusive of food, bills etc. I have a student loan of around 12k but no other debts

At the moment i earn around 18k a year which works out as around 1200 in my pocket after tax. From this i can usually save around 700 a month after fuel to get to work, going out etc etc.

So far i have around 6200 in savings, 3600 in an ISA at 4% and the rest in a internet saver at 3.18%. They are both with abbey, where i also hold my current account.

I want to move out but i feel that renting is a bit of a waste of money so i am saving for a deposit on a small house / flat.

I was wondering if anyone had any advice, or can tell me what they would do in my situation?

Thanks for your help

Jimlad

Blah99

I'm not sure of the terms of a student loan, but I'm guessing it's similar to a normal loan at a vastly reduced rate?

If so, save like crazy over the next year with the aim of buying your first property at the end of 2009/some time in 2010, depending on market conditions. It's unlikely we'll see a similar crash in house prices for another 10 - 15 years after this one has passed, so this is your one opportunity to get in at the bottom. Also remember that you have a "free year" to save for a deposit - house prices are going down at the same time as your savings are going up, which is good news for you.

Wookey

Defo keep saving hard, the bigger your deposit then the less interest charged over the term of any mortgage. Your certainly on the right track which at your age is a great achievement. Bear in mind to that once you have your own place then all bills are paid by you, buying any older property can have pitfalls with regards to maintenance/upkeep and so is wise to have a few spare k tucked away as a lifeline for any unforseen circumstances that might appear. Goodluck.

amcluesent

>can tell me what they would do in my situation?<

Emigrate. England is in the toilet.

LongTermLurker

amcluesent wrote: »

>can tell me what they would do in my situation?<

Emigrate. England is in the toilet.

The world would be in a right mess without toilets...

jack_spratt_2

As other posters have said save like mad !! 2010 may be the time to start thinking about jumping into the housing market but watch what is happening to the market.
The days of being able to borrow 5 and 6 times your salary are gone!! we will be back to more sensible levels .
Also to get the best mortgage rate the bigger the deposit the better

Good luck

amistupid

JimLad wrote: »

Hey Folks,


I am currently 22 and single living with my parents. They charge me £150 a month board and lodgings, but that is all inclusive of food, bills etc.

Arrrh Jim lad! It's nice to see your planning for an independent future. But I hope you're truly grateful for such caring and supportive parents. You can barely keep a dog for a hundred quid a month. I'm not being rude but speaking as a parent who has helped 4 student children find their feet, it's nice to see both sides of the coin. Best of luck with which ever path you chose but don't forget to give them a big hug, you'll never find living so cheap anywhere else.

macca64

Keep on with the saving, but you also need to consider retirement planning, be it saving in a pension or ISA (stocks and shares). Especially consider the pension if your employer will also contribute to the scheme. Also being 22 you have a long time to start saving for retirement, so are able to take advantage of long term growth.

a7man

macca64 wrote: »

Keep on with the saving, but you also need to consider retirement planning, be it saving in a pension or ISA (stocks and shares). Especially consider the pension if your employer will also contribute to the scheme. Also being 22 you have a long time to start saving for retirement, so are able to take advantage of long term growth.

haha nice of you to fit it in there...a mortgage protection policy as well perhaps?

mike88

Your potential to borrow money for house purchase is restricted unless you live in a particularly low cost housing area. As banks/building societies are playing safe at present you may only be able to borrow around £60,000 in the current climate. If that is the case (and I may be wrong) can you afford a property at present? Why not make a few borrowing enquiries first.

Whatever the outcome you are right to be thinking about property purchase as 2009 could be a very good time to buy.

JimLad

Thanks for the advice everyone. I think im going to continue living with the folks for another year and look to buy in 2010 when i have got some money for a deposit and the house prices are hopefully lower. I have today set up a regular saver with the halifax for £500 a month which is fixed at 5% for one year with any other savings going into my esaver where they can wait to be put into my isa come april SOund like a good plan to everyone?