Starting from scratch

megan01

Hi everyone Please be gentle with me.

My boyfriend has agreed to let me help him start up properly with regard to his finances. This is what I know, until I sit down with him tomorrow.

He has a loan with an outstanding balance of about £2000.
He has no savings.
His bank account is with HSBC.
His main end goal is to save up a house deposit, as I have my half and now he wants to save his half up.

I'm thinking of firstly, transfer his bank account to Nationwide who are offering 12 months interest free overdraft. If he is eligible to get a big enough overdraft, pay off the loan with the overdraft, then he has 12 months to pay off the overdraft with no interest, and no loan.

Set up a budget with him to work out where his money goes, and identify any bad spending habits.

Open a savings account, and an ISA.

Set up a pension.

Can anyone else think of anything I should go through with him? Thanks

Hominu

I wouldn't open a Nationwide FlexDirect and then immediately cause a £2,000 overdraft with at least having his salary* deposited there (preferably before going overdrawn), else the facility may be removed.

* - any deposit of about £750 or more per month, don't worry, you can withdraw it again.

trailingspouse

ISA's ansd savings accounts in general aren't very good at the moment - he'd be better off with one of the interest-paying current accounts (which one depends on how much you expect the balance to be). But the first thing to do is to pay off the loan before he thinks about saving.

colsten

megan01 wrote: »

Set up a budget with him to work out where his money goes, and identify any bad spending habits.

This is almost certainly your/his most powerful tool to get on top of his finances. Without a frank and honest assessment (to himself), moving money around accounts will just be like putting lipstick on a pig (i.e. it will still be a pig).

megan01 wrote: »

Set up a pension.

a must, particularly if his employer pays towards it.

Unless he has such a terrible credit file that he won't get current accounts at TSB, Nationwide or Lloyds, he should stay clear of cash ISAs as cash ISA interest rates are significantly worse than the rates of current accounts.