At nearly 19 years old what should my priorities be?

rictus123

Away to turn 19, pay will go from £1070 take home a month to £1390. With the overtime i do itl be over £1500 take home. My outgoings each month are £380 set in stone, with my own spends its upto about £600. So could have £900+ to play with each month. Now iv not done too badly with money so far, iv got a bit in an Isa and some in a savings bond, locked away until November, plenty in my current account for emergencies.

Now i dont want everyone telling me to go out and live, only young once etc because i will still be going out every weekend with the gf, holiday once a year etc so i wont be missing out. I just want to start to learn the value of money, have some money stashed away so im never going to be short.

So where best to put my money just now? When my pay goes up im going to be upping my hours as much as i can to earn as much over the summer i can as come winter theres not so much overtime in my line of work with the dark evenings/mornings and poor weather conditions.


Just need a bit of guidance/advice. Iv got a bit of money to my name right now, hoping il have cleared £5k by the end of the year.

Bit at a time hopefully doing the right thing now, in a few years time il look back and be really proud i did the right thing and il be comfortable in life, not being ruled by money.

Hoping for 10k by next summer.

Next summer my pay goes up again to £30k a year take home. Which will let me save £18k i think as £1k a month for everything while living at home will be plenty.

So where do i start?

Jimmyc

Im a few years older then you and when i was your age i was earning about the same, i was putting away 250 a month. Looking back on it i should have saved more i wasted quite a bit on crap, i wish i had saved more. Save as much as you can, but still have enough to go out with your friends and GF.

Does your the company you work for have a sharesave scheme? Regular savings accounts are good

rictus123

Nope i dont think so. I want to put away at least double that. £6k a year for 5 years im laughing.

opinions4u

1) Always save overtime. Never spend it.

2) Build up an easily accessible reserve of 3-6 months net pay.

plenty in my current account for emergencies.

Keep enough in your current account to avoid being charged. But get the rest somewhere it will earn interest.

3) Use comparison sites like www.moneyfacts.co.uk/savings to identify best paying accounts.

4) Review your accounts every 3 months or so to make sure your rate remains competitive.

5) Maximise cash ISA allowances if you pay tax and be prepared to transfer ISAs from one provider to another if the rate becomes less competitive.

6) Have a decent paying easy access account such as www.theaa.com.savings paying 2.8%.

7) Consider top paying monthly savings accounts such as Northern Rock's 5% offering.

8) Don't rule out making contributions to a suitable pension scheme, stocks and shares ISA and/or an employee share scheme if it's favourable.

I think you're already a long way down this road anyway, so good luck!

rictus123

opinions4u wrote: »

1) Always save overtime. Never spend it.

2) Build up an easily accessible reserve of 3-6 months net pay. Keep enough in your current account to avoid being charged. But get the rest somewhere it will earn interest.

3) Use comparison sites like www.moneyfacts.co.uk/savings to identify best paying accounts.

4) Review your accounts every 3 months or so to make sure your rate remains competitive.

5) Maximise cash ISA allowances if you pay tax and be prepared to transfer ISAs from one provider to another if the rate becomes less competitive.

6) Have a decent paying easy access account such as www.theaa.com.savings paying 2.8%.

7) Consider top paying monthly savings accounts such as Northern Rock's 5% offering.

8) Don't rule out making contributions to a suitable pension scheme, stocks and shares ISA and/or an employee share scheme if it's favourable.

I think you're already a long way down this road anyway, so good luck!

Thanks for that, very helpful! Might get something like the Northern Rock(or whatevers highest at the time of opening) at the start of next year if i manage to fill my Isa by the end of this year. Then for next year il have a lump sum to put in my ISA come the 5th of April but before that il shop around and transfer over the funds in my current one to the best paying one i can find.

As for the money in my current account, iv just put a bit more money from there into my ISA, slow and steady, another £3,750 to put in this year to fill it. £625 a month starting in June. Do able i think.

As for the rest, it wont be needed as its payday Friday but on Friday im going to give my gf £500 to pay for my holiday this summer. Then il give her £70 a Saturday(net pay per Sat worked X 7 between now and middle of July = just under £500 for spends)

So it should all work out nicely. Right now i cant wait for my pay to go up in a months time.

Building up net pay is really good advice, a 60 year old i work with said he was nearly 30 by the time he had 3-4 months net pay, now he has 3-4 years. Its hard to get my net pay as it goes up this summer, then next it goes up again but i think if i save 10-15% of my net monthly pay for this then itl soon build up as i do think i have time on my side.


Main things im saving for really is have a comfortable rainy day fund/holiday fund that can be spent on whatever(spent, not wasted), a nest egg to fall back on should i lose my job etc and the last one a house deposit. Hopefully doing this now will pay off over the years.

Simon11

Put some money away using Santander First Home buyers account offering 5% at the moment! As interest rates go up in a years time, so hopefully will this account. Was 8% a few years ago

To open the account you Just have to be a non home owner, under 35 and able to put in 100-300 every month to get the 5% rate for that month. If you don't put in 100-300 a month, you'll get pretty much 0% for that month only. You can deposit up to £5,000 when you open the account.

Check it on their site.

You don't actually need to be saving for a home either, just need to attend a meeting before you close the account. For them to go through their mortages-however just tell them you're not interested.

Simples

rictus123

Isa will be main home for my money. Seriously since im only 18 and believe strongly in paying myself first, keeping something to show for my money, i should get involved in the stock market. Is it really safe? As in a very little risk factor as obviously a few wrong moves i could lose a good sum of money if most of my money is going into this?

I wanted to invest in Marks and Spencers last week. For stupid reasons so didnt follow up on it

Simon11

Its only worth investing in share if you are prepared to lose it! Can be risky and mostly for the long term benefit. It could go up or down....

I'd suggest for you looking at account where you pay X amount every month and get a decent rate on it! Such as Newcastle 3.40% or santander account i suggested ealier for 5%

Primrose

Congratulations of having such a sensible attitude towards money at an early stage in your life. It should serve you well for the future.
You're probably a taxpayer, so it makes good sense to protect your savings from tax so continually keeping on top of the best ISA deals is essential.
As interest rates as so low at the moment, putting part of your spare monthly savings in a Regular Saver account where you can get a higher interest rate is also an option for you. Maximum monthly amounts are normally £250, and when they mature, they too could be rolled over into ISAs or Index linked National Savings Certificates if you can afford to put the money away for 3 years.

Obviously an emergency fund should you lose your job is an essential, and it's never too early to start putting money in a pension. If you're in a job where heavy activity is essential, it's wise to realise early in your working life that early retirement might always be forced upon you, and starting to make provision while you're young will help take the pressure off your later years.

But the most important thing to invest in is yourself. Improve your qualifications and skills while you're young so that they help increase your earning power over the years.

Judwin

If I had my time again at 20 with £600 p/m to blow on wine, women and song, and £900 a month left over to waste :-) I would....

1) Put £400 p/m into a Cash ISA - £4800p/a
2) Put £250 p/m into a SS ISA - £3000 p/a
3) Put £250 p/m into a Pension - £3000 p/a grossed up to £3750

The Cash Isa serves as a secondary source of emergency cash (after your current account & non ISA savings) if you need/want something. You can top it up to £5200 p/a if you want.

The SS ISA, I'd go with buying 3 or 4 funds on a monthly basis. Personally, I'd go risky on this (I can hear DunstonH firing up the Quattro on me!) - Emerging markets, China/Far East, BRIC etc. Try to leave the money in and don't touch it unless you have to. Plan on 5-10 years minimum. However, if you have/want to you can sell up at any time and get back whatever the funds are worth at that time. Could be less, but the longer you can leave it the more likely it is that these investments will outperform Cash ISA's by several times over.

The Pension - once paid in the money is locked away till you reach retirement age - which on current form could be anywhere from your 68th to 100th bitrhday! However, the sooner you start, the better IMHO, and the less you'll have to pay in later years to get the same retiremnt income. I started paying in £100 p/m when I was 20, and I'm sooooo glad I did. If/when your circumstances change (married/house buying/kids etc) then you can reduce the payments if necessary, but try to keep paying something in if at all possible.

ALL IMHO.

Cheers,
Judwin

rictus123

Hey guys, thanks for all the advice and replies. First thing im going to do is fill my Isa each tax year. So if i get £5k in there by the end of this year then another 3 years of filling it, thats about £21k once you add on tax free intrest. At 22 years old i think thats very impressive.

Anything over and above that will be a bonus. Hoping that i wont need to touch this when i move out and buy a place of my own. Next summer my pay goes upto £30k+ take home. I think earning this for a year-18 months will allow me to save £20k for a deposit and fees etc. Thats just my half, gf will be matching what i can save. Her parents are well off so they will probs help her/us out by giving her a large chunk of the deposit.

So right now priority is to fill my ISA every year. Just think what choices il have if i fill my isa every year between now and when im 30. About £60k not including intrest.

After isa is filled this year il get the highest paying regular saving account i can. The Regular saver will be for my house deposit. The next year il put away what i can but after next summer il get serious and hopefully about 12-18 months later il have £20k to move out. So thats 24-30 months away. £20k/30 = £670 a month average. You never know what might happen though, my numbers might come up! If only!

Thats my only "investment" i do just now. My £2 a week Euro Millions syndicate at work, if you aint in it you cant win it lol.

Im very excited about everything iv mentioned in this post. It might take nearer 48 months to get the £20k deposit though, that would be a much easier £420 a month. But with the overtime il be doing it might just be 24 months.

Going to give it my best shot anyway.