50k to save! GG's Diary..

Hello everyone,

Currently renting a house at the moment with my partner.

We have a savings goal of £50,000 each, to be saved in the next 4.5yrs. Officially started in January, and saved £5,000 by June, but had to pay for a private operation :( so my savings went.

My partner already has savings, and will comfortably meet the target.

I plan to save £1000 a month. I work for myself and am also at Uni (final year this year).

So, I have saved £900 so far this month, student loan installment comes in next month, then I'll have £3200.

Any hints or tips?

I don't spend much on eating out, entertainment anymore.. but biggest issue is the food shopping!! :o seem to spend far too much. So from the 1st Sept I'm going to log all my spends on supermarket stuff.

Wish me luck! 5yrs ago I was made bankrupt, this is a massive step for me to be able to undertake and I'm very glad I've got this far.

New user on here, but been on and off MSE for years now :money:

Oh, just to add, I have £800 on a credit card that I am getting rid of about £250 a month. I know I should pay it off, but can't seem to spend the savings on the card. Might just do it when the student loan comes in. :o:o

G-G
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Replies

  • newgirlynewgirly Forumite
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    Hi GG, welcome! If you are looking to save on the grocery bills and get general household costs down then the best place to start is the oldstyle boards, there are threads on low cost meals , cleaning ideas etc. Best of luck.
    2022 MFW 67 - 33 month challenge to clear mortgage, month 3 completed and on track 🙂MFI3 No.12
  • Thanks Newgirly!

    I shall be checking out the oldstyle board, I used to look there when I was a member years ago. Thanks for the reminder.

    Well, I checked the credit cards and I had £1200 + £200 :(

    So I've now paid off £200.

    Saved another £200.

    I get paid daily as I'm self emplyed, so my savings will be regular and erratic lol.

    Therefore, I have worked it out as;

    Debt £1200.
    Savings £900.

    Plus the general 'float' of my current account.

    Can't bring myself to spend the savings on the debts, even though I know that is the most cost effective solution. Once I get my first student loan installment I will clear it next month. It won't seem as bad then.

    I have gradually been given an increase in my credit limits, since the bankruptcy, which is great news for my credit rating, but I've had to make sure I didn't overspend. I was going okay, and then I think I have got carried away a bit, but the main thing is at least I have noticed it and reigned it in.

    OH's birthday in 2 weeks, already purchased him some things, and the rest I've got from B&M, so things he will love for not a lot of cash.

    We usually go on holiday over Christmas (winter sports), but I've said I can't manage it this year, with Uni and my business gets very busy at Xmas. We both agree we should save instead.

    Not sure what else to say. I hope I read this back one day whilst sitting in my fully paid for house.

    G-G

    P.s - Do you think rent is 'dead money'? is is it the same if you are saving up for a house for 5 yrs, as opposed to paying interest on a mortgage for 25yrs? I guessed it wouldn't be much different really.
  • originalmiscellanyoriginalmiscellany Forumite
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    Part of the Furniture 1,000 Posts Combo Breaker Mortgage-free Glee!
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    Personally, Ifeel that rent is dead money, at least with a mortgage you are paying into your property rather than the landords, and currently, often a mortgage is less than rent, so in many ways it's cheaper. You're right about interest only, but often for interest only it's less than rent, so you might as well save the difference or overpay. Just my 2p worth.
    Feb 2012 - onwards MF achieved
    September 2016 - Back into clearing a mortgage - Was due to be paid off in 32 years in March 2047 -
    April 2018 down to 28.00 months vs 30.04 months at normal payment.
    Predicted mortgage clearing 03/2047 - now looking at 02/2045

    Aims: 1) To pay off mortgage within 20 years - 2037
  • I definatley see what you are saying.

    But I wonder what the actual figures would be?

    5yrs renting and saving £100k at £575 rent is £34,500 (wasted rent).

    £100,000 mortgage over 25yrs;

    5.8% interest = £89,639 in interest.
    7.8% interest = £127,584 in interest.
    9.8% interest = £168,392 in interest.

    Worth thinking about...
  • lvmlvm Forumite
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    Good luck for your savings.

    Is there a reason you are saving a £100k deposit between the 2 of you? Got your eyes on a massive house?

    I have the same target (£50k) and have just reached the £19k mark. Have until Sept 2014 to save the rest (that's when my last default comes off my account and I can buy a house). Hopefully I'll have a few extra £ks of equity in my current flat as well.
  • Hey Ivm,

    We are saving to buy a house without a mortgage, and average houses here are £100-£140k, so in theory we can buy one cash, or only get a very small and short term mortgage.

    Well done on your savings so far!! You must be really pleased :D I have found myself doubting my plans all the time, but I guess when you get a good chunk of it saved, it starts to become more real.

    Are you saving for the deposit for a new place, or to pay off your current mortgage?

    GG
  • edited 31 August 2012 at 9:59AM
    BeckyyBeckyy Forumite
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    edited 31 August 2012 at 9:59AM
    Although the higher the deposit the better, I would consider buying a house with a smaller deposit and mortgage, if you could. Why stay renting and pay your landlords mortgage off when you could be paying your own and overpaying what you would have been savings towards it.

    Although your figures put the cost in perspective, at the end of the mortgage you would own the house, and the value would increase with houseprices, interest would also be less if you overpaid. At the end of the 5yrs renting, you've paid £34,500 and have nothing to show for it IMO. I'm another one who thinks renting it pouring money down the drain and would be buying as soon as possible. It's food for thought!

    Whichever way you go for, good luck on your journey :)
  • Thanks Beckyy :)

    My major problems are the Bankruptcy 5 years ago and that I am self employed now (only 18 months), so I have a poor credit rating and no proof of income.

    I'm going to save as much as I can, and then maybe in 3-4yrs try for a mortgage and see what they say, when I have some accounts, but I can't see me getting a mortgage approval before then :(

    I guess, if you had a good work history and a good credit rating, what you suggest would be ideal.

    I guess, I'm trying to convince myself that the bankruptcy won't hold me back, but in reality it's going to be an issue for me unless I pay for a house in full.

    Thanks, GG :)
  • lvmlvm Forumite
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    Hey Ivm,

    We are saving to buy a house without a mortgage, and average houses here are £100-£140k, so in theory we can buy one cash, or only get a very small and short term mortgage.

    Well done on your savings so far!! You must be really pleased :D I have found myself doubting my plans all the time, but I guess when you get a good chunk of it saved, it starts to become more real.

    Are you saving for the deposit for a new place, or to pay off your current mortgage?

    GG

    I'm saving for a deposit for a new house (but hoping to keep current one to rent out).

    I'd love to be able to buy a house too in cash outright but I'm afraid that's never going to happen considering I live in Edinburgh.

    If I were you, I'd try and save for a 40% deposit and your bankruptcy should be off your file after 6 years and if in about 2 years where you have 3 years accounts, maybe speak to a broker and see what he/she thinks. You may be able to get your house sooner than you'd imagined!

    P.s I've just signed up to the mortgage free in three T3 challenge...get yourself over there!
  • Thanks Ivm,

    I think it sounds like a sensible plan to see about buying in 2-3 years, I'll just do my best until then and then see what a broker says. I used to be a mortgage advisor, ironically, so I know it's not impossible to get a mortgage with my situation.

    I hope you manage to save as much as you need! We would like to get a buy to let property after buying our main home, but I guess first things first for us! lol.

    I will try and find the T3 thread! Thanks :D

    So excited about being a homeowner one day soon!
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