another recent-ish graduate .. where to invest and save?

lox25

Dear all,

I'd be grateful for any advice on this..

Basically before I got my current job I was a broke student, living on a nearly maxed 2k overdraft with 2 student loans (1 governmental, 1 commercial for postgrad). No credit card and no savings, just overdraft and part-time work, day to day living.

been working just over 1 year and have paid off over 10k debt in that time, including overdraft and a good chunk to both loans. My monthly costs are low due to where I live and a pension of 400 quid a month and health insurance of about 75 quid are taken out of my salary before I get it anyway. I can get pension back when I finish the contract if I don't continue with this company.


Since I hadn't had money..ever. I did spent quite freely for the first year on travel and material goods i needed like laptop etc and living a little.. However, since the job is not forever, realised need to start saving and be a bit more careful.

By the end of the year I should have 15k in my current a/c and can probably make it 20k by end March 2012 next year. I think it's a bad idea to have this money in that a/c rather than a savings a/c but not sure where to put it..? I need to have access to it because the future is a bit unknown due to the area in which I work. Could be employed and earning a similar amount or could be unemployed/ investing in another course I should do/languages. So can't really invest it where I can't touch it.

Also I do not pay tax in the UK because I am based outside of Europe and that makes my living costs low compared to UK making it easier to save. But I have also forgotten what it costs to live there and basically no idea what is normal financially and what people my age should do with their cash (24-25).

When I finish and get the pension money I was thinking of paying off my corporate loan with it (10k over 5 years at 9.9 percent APR-4 years left-paid about 2k so far) but maybe it's better to have access to that cash in-case I am unemployed for a little while..

Any input would really be appreciated!

Thanks.

atush

Personally, I would leave the pension alone/invested, as you will need to retire eventually and at no later time will you find it as easy to save for a pension. Certainly not after you are paying a mortgage or have a family for example.


as for savings, you haven't told us where you are and what currency. you may be best opening a savings acct there for now. you can't open an ISA til you come back.

Do you still have a UK bank acct? If so, that banking group may let you open a savings acct online. And you can look at the offshore market (ie Jersey, IOM etc) for savings products too.

guitarman001

£10k loan paid off, holidays, buying material goods, £15-20k soon to be saved, £475 a month for pension and health... jesus, your first job must pay a WHACK even considering your money is tax-free! What do you do!? And where outside of Europe is it?

lox25

Thanks for the advice.. hadn't considered offshore.. so something to look into.

I have a UK bank a/c and my loan is with a UK bank and student loan with the UK gov. Also get most salary paid into it.
Figures I gave were in UK pounds , converted from USD. My salary is USD but most of it is converted by my employer and paid into my UK a/c in pounds.

I'm based in sub-saharan Africa, and have an account here but I just get a small percentage of salary in USD paid there so can withdraw it in cash for rent etc. Not so keen to put too much money in it since won't be here forever, and the banking experience is quite different here and it's a cash society.

lox25

It's not quite tax- free because I pay something that is basically equivalent, maybe slightly less than what I'd pay in the UK for tax if I had similar salary. That reduces the net salary, however because of where I am based and for relocation , I get extra benefits and most of them are just divided by 12 and paid along witht he salary each month so don't really differentiate. International civil service..

guitarman001

Thanks for the reply and best of luck!!