Everything you could possibly imagine saving for 'diary'!

Kate.Trotter

I didn't say it saved me money, but who says you have to compromise on EVERYTHING to still save money? We buy some things we want (by all means not all) but we still put money aside in savings every month. I think the balance we have is fair! I hate the saying but, 'You only live once' - and do I really want to spend my whole life going without all luxuries? We have a balance between saving money and spending money, we are still managing to save a lot of money towards a wedding and we still have a mortgage on a nice house which is an investment in the long run towards getting our final dream house. I don't see why saving has to be about not spending anything but the bare necessities?

In effect you are saying to save money you shouldn't buy anything that you don't 'need'.

All of our bills (including money aside for cars etc) comes to just under £2k a month. With our basic wage between us being £3.1k - that leaves us £1.1k for spending, saving and repaying debts. Saving over half of that is pretty reasonable I think?

Kate.Trotter

Also just a quick note, I didn't think my savings for the wedding that I posted in the first post were correct, as thought we had more. Double checked and we do - seems my spreadsheet didn't save last time!! We've actually got £3,647 towards it

bjaich

Hello Kate

Hope the below gives you some food for thought...

I would establish a priority list of your goals and allocate individual monthly amounts required to achieve those goals.

For example (dates and figures used for illustration only):

1 - Cost and deposit for a new house
£30,000 August 2016
£1000 every month for 30 months

2 - Cost for wedding
£5,000 August 2015
£278 every month for 18 months

3 - Cost for new car
£5,000 December 2015
£210 every month for 24 months

4 - Cost for Holiday
£5,000 January 2015
£417 every month for 12 months

etc ...

Then each month you put the money aside in order of priority and if you don't have money for all the 'pots' the ones with the least priorities will not get filled. Therefore if you don't have the full required amount for priority 4 (Holiday) in January 2015, ok you can't go on the holiday but all your higher priorities do not get compromised.

Also do not forget to set aside money for real emergencies such as redundancy. Most people would recommend 3 month of essential spending such as mortgage and bills.

In regards to bonuses, unless they are 100% guaranteed, I would only count when actually in your bank account and not pay deposit for items such as holidays in anticipation you will be able to pay the balance when you hopefully get a bonus.

I understand not paying cc off if they have 0% interest. However I personally would have the money in a saving account and not count it as savings or allocate towards something else.

Please note those are just the things I do, everyone has different ways which work for them.

In regards to savings I don't think there is a right or wrong way as long as you save and do not take out credit to cover none essential items. Of course the definition of essential items will also differ from person to person....

jimjames

The one thing that doesn't seem to have been mentioned is that you have a loan/credit card outstanding as well as savings. Keeping savings alongside a credit card balance is just deluding yourself as your net balance is the savings minus debts.

Paying 20% interest on credit card and earning 2% on savings is crazy so definitely worth paying that off asap with any savings and then rebuild your balances.

Good luck with it all!

Kate.Trotter

Hi Bjaich,

Thanks for your advice above, greatly appreciated and will definitely take this on board! I have never considered a redundancy fund before, but it sounds a very sensible idea, so will look into doing this!

In terms of bonuses, we do exactly what you say, this is never counted in our basic monthly wage, and is usually used towards something we've been saving to buy (e.g. tumble dryer!) or goes into one of our various savings pots. We are very lucky as these have been a regular part of my partners income for the last years, but we are very aware that you never know when this could stop! For the time being we are counting ourselves as very lucky, and using them towards our specific goals

Kate.Trotter

Thanks Jimjames - we aren't currently paying any interest on the credit card, and I believe it should be interest free for at least another 12 months. We have about £1000 on there currently. I agree in that we are deluding ourselves slightly with the not paying it off and having the savings instead, however I am worried that with the wedding payment due in only 6 months time, by paying off the credit card now, we might not have enough to pay for the wedding, and the thought of putting more back on the credit card after paying it off is something I struggle with. I guess it's more of a conscious thing, rather than any sense. I would rather keep what we owe on it and gradually reduce, rather than pay off to have to put more back on if we don't have enough for the wedding.. if that at all makes sense??

Eco_Miser

Only paying the minimum makes sense while the card is at 0%, but at normal rates it is cheaper to pay off as quickly as possible, using savings if available, and then borrow again if the need arises.

Kate.Trotter

Sorry not had a chance to update as of yet!

Had a few ups and downs so far this month, but I think more ups!

Downs:

- Have gone way over our food budget for the month, we seem to have spent a lot over Christmas somehow (alcohol I expect!!). This means unfortunately we will have to take the overspend out of next months budget, so it's going to be a case of economising and staying tight in Feb!
- Our wedding is looking at coming in a little over budget so far
- After arranging a night away in March for a joint birthday thing for a few of my friends, planning well in advance to save for my hen-do and also putting some money towards partners birthday present, I have probably already left myself with only around £50 spending money for the whole of Feb

Ups:

- We are putting a side a little bit more towards our wedding to try and account for the overspend, also hoping that we can reduce costs in some places. Also we have around £250 due to come back from Quidco shortly, this will be going into the wedding pot!
- Booked all of our Honeymoon and managed to keep to our £3k budget. Really can't wait
- Bought our wedding rings online via Hsamuel who were offering 12% cashback on Quidco - This means we're receiving over £50 back which is great!
- A colleague gave me a friend referal code for Abel & Cole, this means we got a £26 Fruit & Veg box completely free! So much stuff we had to give some to my parents. Has definitely helped out with the lack of food budget this month!
- Our Sky 12 months half price deal ran out which mean it went up to £91 a month, we've now decided to switch to Virgin as we've managed to get much much more for our money, half price for 6 months, and £160 cashback on Quidco

I'm looking at getting us a higher interest savings account, we need regular access to it and are paying quite a bit in each month, so an ISA isn't really ideal for us at the moment. Also anywhere that doesn't take 3 days to transfer money out would be really handy(currently with ING who do this!). Anyone have any suggestions?

spock007

First off, you haven't bought your house and you don't own your home until the mortgage is paid off. Until then you and everybody else owing money to a bank is a home-loaner. Second, ditch the £8.5k wedding - way too expensive considering you also now have other debts and are considering an expensive trip to Oz. Lastly, good luck with a £100k a year job - I don't know what your career is in but unless it's banking, IT consultancy, oil & gas or successful business owner, it may be a bit of a daydream. I'm on about half that but I'm looking at $150k moving to the States if I'm lucky. I say lucky, but disposable income might be LOWER there due to rent costs and the like. Sounds like you want to pay off things as quickly as possible but it wont happen if you're spending big; however I'm actually FOR spending money to have a good time while you're still young. All about balance. None of the above is meant to be harsh, just my own neutral view!
Oh, you've got a good joint income there. Better to have two decent incomes than one large one. EDIT - I'm very interested now to know what you actually do to be aiming for £100k a year

Jegersmart

Kate

As others have said, well done - you are very "together" for an early-twenties person.

My advice would be this:

1. Really look at why you want to move house again so soon. This alone will be more expensive than all your other plans put together.

2. The wedding - well I am not the marrying kind but the cost seems very reasonable for these days -and if this is a priority or you are in a hurry to do so then why not?

3. You mention children, which will clearly cost more than moving house and all the other plans put together and many times over. I would definitely consider putting this on hold until you are financially secure - for all your sakes.

4. I am glad you mention wages, and this alone shows you are ambitious. Most savings diaries on here seem to be run by people who are in a situation where even the hope or possibility of increasing wages over time is completely impossible. I have commented a few times that if you have found something you enjoy doing then looking for ways to increase your salary is even better than saving. One's pay rises are perpetual and not one-off (normally) so the benefit is ongoing. There is a big caveat though here, and that is that if you don't find something you enjoy then money is not everything. I am about 20 years older than you, and can tell you that in London at least, £100K salaries are becoming more common-place - by the time you are 30 maybe even £80K will be the average wage....;)

5. Also consider your risk profile. At the moment you have a £170k ish mortgage with a combined salary £3.1k per month with outgoings including that mortgage of £2k. That means if either of you loses your job or is unable to work for some reason then you are immediately in the red. Sure, you may be able to reduce somewhat but you need a decent buffer.

Conclusion:
Wedding is going ahead, so just pump money into that and get it done. Pay back credit card and family.
After the wedding is paid for you must save up for a buffer to be kept in a readily accessible place and should cover at least 6 months of normal expenses - i.e. £12k.
After the 6 month buffer is in place I would be paying off that mortgage as fast as possible. Even if your interest rate on the mortgage is sub 3% this reduces your debts and therefore your risk especially if you are looking to move again soon and to start a family - although I would strongly advise against these two at your level of salaries and your outgoings because it will simply put you at financial risk.

HTH and GL!

J