how would you do it?

marisco_2

Firstly congratulations to you both for securing better paying jobs and increasing your incomes. That is no mean feat at the moment. It's great that you have got yourselves into a position where you can increase your financial security and work toward your goals.

In my opinion balance in all things is the way to go. Otherwise you could be compromising too much on enjoying family life, whilst saving for the deposit on your first home and covering unforeseen circumstances. I would recommend putting £750 by into a savings account for the house deposit and then splitting the remainder between an emergency and leisure fund.

Investing the money in an easy access account wont pay the best interest, but if a big expense crops up it takes away the worry of being able to fund it. A flexible and realistic approach is the one I would take.

ska_lover

I would save it all - for a house deposit. 1k a month will build up really quick and you will have your house much sooner than in 6 years - eg after 2 years you would have 24k - and then, you can have all the family holidays you need.

But that is just me, our priorities at the moment are saving for a deposit and I don't see the point in dragging it out, when you could hit it hard now, and be living in the house of your dreams much sooner than anticipated.

I think saving can somehow make you feel like your life is on hold, and deffo would want to do it this way, get it over and done with.

double_mummy

we are planning on saving until 2019 as we have defaults on our credit file and these will be gone then giving us the chance of getting a better rate and also needing a lower percentage mortgage

thank you so much for your kind words marisco i think thats what we are looking for just a good balance between everything making sure we plan for our future (my friends think it is hilarious that i have a pension and im not even 25) we are both well aware that things could change (we could seperate etc) but we both have had our sensible heads on and discussed this and lots of other what ifs we have lots of plans for the what ifs (building emergency fund in case one loses job etc)

yorkie thank you for that link it is excellent

we can count out a couple of events coming our way (we are married, i cant have any more children, children are young enough at this point so i dont have to think about cars or college etc) i think the big two for us are separation and loss of job

i think we both have different views on the house thing both our parents when we were growing up rented two parents still do and one now owns (but only since their 40s) so owning a house has never been an OMG we must do it thing but i am starting to see it as a long term plan where we could pay the mortgage off by the time we are in our 40s then downsize once the kids have left home and keep that property to rent out therefore giving us a little extra in retirement if we could manage to build up a portfolio of 2 or 3 houses that we are letting out by consistently overpaying the mortgages and then saving hard for the next deposit

January20

Saving for the future is a great goal, but you have two young children so don't forget to live in the present. Your children will be teenagers and then adults a lot quicker than you think.

Soleil_lune

Easy: if you want to save a thousand a month and he wants to save eight hundred, go half way: save nine hundred. Simples.

ViolaLass

I think buying a house is an admirable goal but you MUST prioritise an emergency fund. There's no point buying the house if you can't cope if something big goes wrong.

Saving for an emergency fund need only take 6 months or so but there's no way anything else could be more important.

Dunroamin

Does your household budget that covers everything, also cover any leisure activities? It isn't clear from your first post.

If it doesn't, then it isn't realistic. You obviously save for a holiday but the cost of going out together, whether as a couple or as a family, needs to come out of your normal budget rather than savings.

Kynthia

Have two 'funds' as such, one for short term savings the other for long term and put them in different locations. Short term can be for things you expect in the next rolling 12 months like holidays, activities and annual large bills like car insurance. This would need to be an easy access savings account where money can go in and out regularly with no effect on the interest. Then the bulk can go into long term savings, which unless there is an emergency that can't be covered by your short term savings isn't touched for years. When the times comes, depending on how much you have you can use it for a deposit, new car, university fees, etc. there's no need to know now what the split is for different long term goals as plans and circumstances change over the years, just agree that it's not to be touched for years unless it's an emergency. This can go into ISAs and accounts that limit your withdrawals but pay more interest.

Kayalana99

double_mummy wrote: »

if we aim to buy in 2019 my way we would have saved around 50k doing it his way we would save about 15k so its the difference between a 90% mortgage and a 60% one then also if we are used to saving that amount we can then transfer the money that we pay in rent and have been saving and use it to over pay the mortgage as we would have been paying it out anyway

this obviously doesnt take into account any possible future pay rises or reduction in outgoings

I'd whack £900 in the pot and spend the rest personally, as what you do with that money (if you wanted a hoilday Id either use the £300 to save up with not use part of the £900 for a leaisure fund)

In 5 years you'd have 54k, how you want to 'distrubite' the money i.e E Fund or house deposit shouldn't really matter because you'll have the money their.

It's nice/better to have an E Fund, but the fact is although the money would be set aside for the house deposit its still their for you if an Emergency arrived so I wouldn't bother to spilt it.

Also remember after the first year you'll have 10k, thats £300 interest a year to add so in theory is actally another £1200 (loose figures thats 4 years interest at 3% on 10k) and 2nd year you'll have more interest on 20k instead of 10k so you'll probally end up with about 60k anyway(again loose figure you'll have to do the maths if you want to do it this way) if you just stuck it in a good savings account so really...your E Fund could build itself with the interest and you could have 50k for a house deposit and 4k for moving costs, solictors, doing the house up etc

go_cat

If the OP has defaults on their credit files they may find it more challenging to get a decent mortgage rate until this drops off.

Keep an eye on your credit file and save a such as you can