Saving Diary of a First Time Buyer

TooClumsy

Hello!

First time starting a new thread-have been reading lots of posts on this forum for a while now and seeing as DH and I have our Savings target-it would be fun to document...(for me at least anyways!)

Background: Late 20 somethings who have been married for just over 18 months, living with in laws and paying a small contribution there.

I am currently in debt from my rebellious and frivolous student days from a couple (coughs;)) years ago. I would only pay the minimums and to say the least-the debt is still here, hanging over my head. Flashback to Eeyore and a rain cloud above him

Hubbie has no debt, but worryingly has received around 3 letters asking for money for a contract or something-that he never had. He has always called them to explain and we haven't had to pay anything out. Have signed him up to Experian so we can have a butchers and see if anything dodgy shows up on there, although waiting for the PIN in the post is a pain!

So goal is to buy a house in London :eek:

We both work in London-I work in Central London and hubbie works just outside in Essex. Our combined income is £39k and using a rough 3 x joint income would only give us £117k mortgage. Fingers crossed that it is more as we could not afford over £50k deposit.

So...Hubbie is saving just under £750 a month and I have stopped saving and have used the money to wipe out my debt-I used the snowball calculator, which was oh-so-good and my debt free date is Feb 2015

So targets are:

Year 1: £9798
Year 2: £17638
Year 3: £17638
Year 4: £17638
Total Target: £62712 :eek:

Right now I feel empowered because we can afford this and in despair as it is soooooooo far away

So-60 Paydays to go

Lokolo_2

Well done for noticing the error of your debt ridden ways, I can't imagine how hard that must have been to change your outlook when you were so used to spending! It's great to be able to reduce your debt every month and watch the figures get better!

The joint target you have is quite high, but also realistic as your outgoings will be low living with relatives and your joint income is reasonable. It should make a nice chunky deposit for when you buy a house. :j I wish you the best of luck in achieving your saving goal.

TooClumsy

Thanks Lokolo 2! It's actually quite sad, but the majority of the debt was from years ago and I got caught up in the minimum payment cycle so the debt was not closed at all.

I cannot wait for payday so I can see the money go to better use than being in savings. We could have knocked the debt out quicker by having no savings and being debt free quicker- but the thought of 0 savings gives me the heebie jeebies!

Hubbie has just opened a 123 Santander account so hopefully he will start earning some interest. We are starting with just under £1.8k savings (not included in the target)

Forgot to mention before but our budget for a house is £250k, using a deposit of £50k, remainder of money will go towards stamp duty, legal fees, moving costs etc. does everyone purchase all white goods for a new home straight away? How would you budget for this?

More questions than anything, brain is always thinking of something or another-even though it's such a long way away!

Lokolo_2

TooClumsy wrote: »

Thanks Lokolo 2! It's actually quite sad, but the majority of the debt was from years ago and I got caught up in the minimum payment cycle so the debt was not closed at all.

I cannot wait for payday so I can see the money go to better use than being in savings. We could have knocked the debt out quicker by having no savings and being debt free quicker- but the thought of 0 savings gives me the heebie jeebies!

Hubbie has just opened a 123 Santander account so hopefully he will start earning some interest. We are starting with just under £1.8k savings (not included in the target)

Forgot to mention before but our budget for a house is £250k, using a deposit of £50k, remainder of money will go towards stamp duty, legal fees, moving costs etc. does everyone purchase all white goods for a new home straight away? How would you budget for this?

More questions than anything, brain is always thinking of something or another-even though it's such a long way away!

Ahh my mindset is that the minimum payment is never worth it because of the extortionate interest lenders charge on the remainder!

I know what you mean about still wanting savings when you have debt, this is something I'll have to change my mindset about when I buy my first house (saving for that at the moment!) with a mortgage especially if the mortgage rate is higher than what I'd earn from savings!

I think you definitely need to budget for the white goods into the total amount you aspire to save, then it won't come as a shock when you do move into the new house and you'll have appliances sorted rather than stressing about not being able to afford them!

The Santander 123 Account and also the Nationwide Flexdirect current account are good to make reasonable interest on small amounts of cash.

It feels like a long wait till payday though, I used to get paid weekly in my old job and budgeting was easier than now that I get paid 4-weekly, of course there is more temptation to spend with larger amounts of salary appearing in the account!

TooClumsy

Min payments are the banks way of holding onto you! I started paying £30 fixed payment on a card that usually has a minimum payment of much less than that. I didn't miss the money in the budget and now its completely paid off-as of this month, and just 2 months ago-they increased the credit limit! Cheeky I would say!

Snap for saving for a house deposit-and your first one at that! How are you managing to save-are you reaching your goals? How long before you reach your target savings?

I think I already have a Flexdirect Current Account..I think. I dont want to open any accounts this year as I am focussing on paying the debt and OD off. I will open one in Jan next year to prepare for my savings contributions-will see which is the best account for this then.

Do you have an ISA? I have read a lot of people mentioning they have a number of ISAs, collected from the past years-do you think that they will withdraw the money in like 5 years or more short term?

I've always been paid monthly so have gotten used to loving some months over the others-but saying that this month seems to be exceptionally long! That could be because I have a plan to slam-dunk my debt and the wait is just making it seem long lol.

Lokolo_2

Regarding saving for a deposit, I have quite a high target in mind (£120k). I am lucky as I am living at home with parents (I'm 24) so my only major expenses are rent (£200 a month), Petrol (£80 a month) and Insurance (£45 a month). Right now I am at £105k

Although I am on a relatively low wage of £20kpa (approx £1400 a month after tax and pension) I always aim to save around £1000 a month. It is difficult as I end up scrimping on luxuries, I don't really enjoy myself because saving has become my number 1 priority. I am also single which is my reason for wanting such a large deposit as I am worried I would not be able to get a big enough mortgage with my low salary. (I'm looking at houses between £170k-£200k)

Good on you for focusing on clearing the debt, you won't regret how satisfying it will feel when it's all paid off! I know that waiting to reach your goals is difficult, I feel the same impatience whilst saving, we just have to keep focussed!

ISA's, yes I have opened and filled one each year for about the past 4 years, the prospect of tax free interest was too much to miss out on, but I see the rates are quite poor at the moment, mine are all fixed term ISA's with a fixed rate. When they do mature I am likely to withdraw and keep in an instant access acount as those funds will form part of my deposit for a house!

TooClumsy

Holy C*w! you have done so so so well! You are a couple of years younger than me and have managed to save £105k? that is amazing!

Our earnings are pretty much the same-we pay £150 a month for rent/contributions living with inlaws. We have a whole host of other things (eating out, recreation etc)..are you doing any of these things? It would be great to see your SOA-even if you want to message me privately.

How exciting to be nearly there-your deposit is double mine and you have £15k to go, which you will reach by the end of this year How many years have you been saving?

Wish I had a savings angel on my shoulder when I was 16 lol :A

I have always said-its not about how much you earn-its about how much you save. Some people earn a lot more than we do and have hardly any savings, so you're definitely in a great position!

tara747

Good luck with paying off your debts and saving for a depoit, TooClumsy! You'll find that saving becomes addictive. Every little bit adds up!

Lokolo 2, as ever, I take my hat off to you. :beer:

TooClumsy

Thanks Tara747! Your signature is very impressive! Hopefully it will become a way of life vs a guilt trip

Although I was thinking, we may not pick up momentum as we are not scrimping and saving alllllll the way-if you know what I mean? We are simply saving the money, but not spending-but we still having an eating out budget, etc.

Do you think we need to give these up??

Hubbie and I could take up playing on our PS3 again-we were using this as a cheap alternative to going out etc. Its not the same as drinking, clubbing etc-but it works for us

Also need to get out more for exercise-we have desk jobs and hubbie drives to work so I only get my commute for 'exercise'.

I had to tell a good work friend of mine about our debt-kind of vaguely. I explained that I had spent my work drinks budget in the first week of the month and I would have to miss it that week as we are saving for a deposit and paying of debt. He was very understanding, but we also have some friends who...er more inclined to go to expensive places-even though we had explained that we are saving money

It almost feels like it is kind of a race between us, but we are in completely different situations re in laws. Their situation is unbearable according to her and she wants to move out asap-whereas her husband is dragging his heels and saying that the prices will come down.

rar!

tara747

I wouldn't advise you to give up your pleasures. Just be a bit more MSE. Early bird menus, voucher deals for your favourite restaurants, going to friends' houses for dinner occasionally etc.

I certainly don't live as frugally as possible. I enjoy certain things in life and I will happily spend money on them. I travel a lot, and I like socialising.

The secret is not to fritter money away on things that are unimportant. To me, that's (for example) print newspapers, takeaway coffees, lunches during the week etc. I make my own lunches - healthier and cheaper. I read the news online.

This means that I have more money in my budget for the things that do matter.

It becomes second nature after a while.

TooClumsy

We are currently flat sitting for my own parents so have had to learn how to plan ahead so you have the essentials to cook with etc and not having to do a mad dash to the shops. We have been managing on £150 a month for 2 of us-I think that seems pretty lean?

My lunch budget is £100 and I definitely end up spending it, leftovers are usually what I take, but adding up the odd bacon roll and snacks that are on offer near work

Moving back in with in laws, the food budget should in theory go down-but not so much so if we are bringing in food from home. In laws don't really make food that we could take to lunch also they are Veggies and we can't make eggs as well-so we do feel a lack of protein in our diets whilst there-home made protein that is

We usually go to Pho, Tortilla and Nandos as the most expensive! I guess it just adds up-but we can definitely make a saving here. In fact, just had a look at the budget and seen that I have cut out eating out from March onwards. We do have a meal with friends that has been on the books for 2 weeks already-so this swallows up our eating out budget.

I also dont buy print newspapers-read online, I do spend £20 or so max each month on books for my kindle, dont buy coffee/tea from outside either, wait till I get to work and have it for free