Savings Log of a 26yr old on low pay

zcrat41

MW - just read your thread and LOVED it! You have done FAB

Whereabouts are you on the job front at the moment?

longleggedhair

Hi Moneywaster, have been reading your thread for a long time but only just signed upto MSE. I am also on a low wage but am very careful and have managed to save quite alot. As you say I also know many people who earn much more than me, but who waste their money and are financially alot worse off. Keep up the good work :-)

MoneyWaster2007

longleggedhair - thanks for reading/posting in this thread. I'm interested to know, how did you save up a lot of cash, more specifically in which ways are you careful with your cash...could be some useful tips to help us all out here :cool:

zcrat41- thanks, in terms of job hunting, I'm checking the job centre website daily, looking for anything I could turn my hand to...however most of the jobs advertised are via recruitment agencies, which would be a step backwards for me. It would also bring with it job stability uncertainty, the last thing I need. Also, trying to get around my unceremonial exit from my previous employment is not easy, which limits me further. Still trying though.

turbo.jet- I hope you're right. I guess it's just a case of sticking to the core principals and watching the nest egg grow

longleggedhair

Hi Moneywaster. Well I only have a small income (£12k) but I save as much as I possibly can.My costs are low. One of my biggist tips is not going out with money on you unless you are specifically going shopping. Impulse buys seem good at the time but come back to bite you! I do most of my shopping on markets which saves me a fortune. I dont intend to live my whole life frugally, however I would like to have enough money to feel comfortable perhaps around £100 k and will ease up then! Starting small lhelps, and plus I have been lucky. I invested back in shares back in 2008 and made some big money then. And I have brought some again in the last few weeks with prices having fallen and im up by a thousand. However this is not for everyone. Its easy to lose money and get your fingers burnt.

MoneyWaster2007

Investing...something that interests me. What's the deal with that ie. where do you find info for beginners? I guess placing money into an ISA is investing of sorts because you are getting growth...albeit not as much as you could in stocks and shares. Where did you learn about investing longleggedhair?

mw2655

hi mw.


on a low wage i wouldn't invest in shares if i were you.

i'd concentrate on building up cash savings.

remember shares and investments can go up and down!

cheer matt

mw2655

read "smarter investing" by tim hale BEFORE you invest anything.

matt

atush

longleggedhair wrote: »

Hi Moneywaster. Well I only have a small income (£12k) but I save as much as I possibly can.My costs are low. One of my biggist tips is not going out with money on you unless you are specifically going shopping. Impulse buys seem good at the time but come back to bite you! I do most of my shopping on markets which saves me a fortune. I dont intend to live my whole life frugally, however I would like to have enough money to feel comfortable perhaps around £100 k and will ease up then! Starting small lhelps, and plus I have been lucky. I invested back in shares back in 2008 and made some big money then. And I have brought some again in the last few weeks with prices having fallen and im up by a thousand. However this is not for everyone. Its easy to lose money and get your fingers burnt.

I started off slow too, over a decade ago. And made some, lost some, but made more. Only invest in single shares when you can afford to lose. I did a lot of buying every time there was a market fall, incl 9/11 and just recently.

Good places to learn are the Motley Fool, Digital Look, Trustnet among others.

But the best way to invest for a newbie is investment trust savings plans. They start from as low as 20 quid per month (I started with Invesco perpetual income and growth) and go up from there. Witan takes 25/mon, F&C takes 50. I did this alongside my early stockbroking efforts.

Buying costs are low, and investing monthly you take advantage of Pound cost averaging in that when prices are falling you pick up more shares/units than when they are rising. Which means when prices rise again you have more shares to 'bounce' than if prices had remained stable. This helps you survive and thrive even in periods of market volatility.

longleggedhair

Hi Moneywaster.

I suppose I learnt through doing alot of reading on the subject, good web pages have been mentioned above, and through learning as I went along. However as other posters have said you need a good cash buffer before you consider shares. I have made money but also lost it. I lost about £1200 on RBS shares over three years ago and it hurts to this day, but I have also made alot of money back. I also invest in "investment trusts" through F&C. Have a look on their web page, this may be a good place to begin and as said you can start low. The trouble is with cash saving although it is safe you are actually losing money. I get 3% on my cash ISA, however with inflation at around 5% I am actually losing 2% of my money per year, so my strategy has been to have some money in higher risk assets (shares) and some in cash paying the best possible rates. I suppose I have about 50/50 at the moment, which I am comfortable with. Hope that helps!

MoneyWaster2007

Just had a look at the F & C website and like the sound of the PIP where you pay £50 pm. I'd never heard of this before now. Does it generally pay higher than 3% which is the current best rate for cash ISA's? What sort of returns have you had from this investment?

And how much cash would you recommend I build up in my ISA before I consider investing?