Advice on how to start saving

RTC87

Hi,

Well where to start, I'll try and keep this brief.

My partner and I have found out we are expecting, we weren't planning on this but once over the shock believe we're ready to take this step. We have a combined income of £40,000 a year so should have some savings you would think...

Unfortunately we have been over extending ourselves the past few years and while not in massive debt (£600 left on car finance and £2000 on a 0% credit card we're clearing month by month) just haven't really saved.

We live in a rented apartment and the baby is due March next year. Our current plan is to leave this flat November 30th when our contract expires (or earlier if we can somehow negotiate with landlord) and move in with my parents until the end of January or early February. This will allow us to save around £1400 a month for at least two months. Once back in rented we will be saving around £400-£500 a month so really need to build up as much as possible.

So on to my questions...

1) My partner and I bank separately, all the household bills comes out of my bank and she sends me £400 a month to cover half the bills. should we setup a joint account to save or separate accounts?

2) What is the best account for our situation, we need access to the money as it will go up and down, when we move, can save more/less etc.

3) Finally, maybe not the thread for this but does anyone have experience trying to negotiate with landlord for a early release from the agreement? An extra month saving would make a massive difference.

Thanks in advance.

Mistermeaner

guarantee everyone will say santander 123 as a joint account for you both.

You dont mention above but have you both investigated what you may be entitled to in terms of income support / child benefit etc..... somewhat related as well is whether one or other of you will drop to part-time / stop working altogether - you dont mention how the wages are split but it may make sense for the lower earner simply to stop working, at least for a few years.

I would always encourage saving but honestly the first few years of your babies life while trying to build a home etc. I wouldnt be too worried abotu saving - just dont get into unneccassary debt.

RTC87

Thanks for the reply.

To give a bit more info my wage is £27,000 and my partners 18,000.

She was planning to have a short maternity, say about 12 weeks. After that we are lucky that she should be able to work 2/3 days from home and we have a few family members that would be willing to watch baby for a couple of days a week.

I haven't looked in too much depth at benefits (don't know where to start as I've never claimed any benefit in my life), from what I can see we will get the Statutory Maternity Pay while my partner is on leave and £20 child benefit a week.

I don't think my partner would benefit from leaving work and we may struggle to much to pay our way if that is the road we walk.

kangoora

Maybe not specifically 'savings related' but I can remember when we had our first. £60k mortgage on a joint income of £20k, then we lost DW wages of £5k and interest rates were at 12% or so.........

We bought virtually everything for the kids on car boot sales (especially strollers), you can even find baby stuff in original wrapping occasionally for peanuts.

Lets face it, up to 7 years old little joe or joyce don't give two flying hoots where their clothes come from (mine still don't care and they're 17 and 19 now). Any pressure to kit them out in the latest kiddy fashion comes directly from the parents or friends of parents. Let the grandparents buy the new stuff

We kitted out the house from Barclaycard points and ESSO tokens (luckily I travelled a LOT for work and could rack up these on expenses), all our carpets were end of roll remnants (small rooms) etc. Looking back I can still remember making a Tesco chicken last 3 meals, chicken and chips, chicken sandwiches and then throw the carcass into a soup pot for chicken soup - to this day I try to avoid chicken .

Not saying you need to go to these extremes all the way but probably worth checking out the other money saving forums for saving tips also if you're serious about racking up savings.

Mistermeaner

RTC87 wrote: »

Thanks for the reply.

To give a bit more info my wage is £27,000 and my partners 18,000.

She was planning to have a short maternity, say about 12 weeks. After that we are lucky that she should be able to work 2/3 days from home and we have a few family members that would be willing to watch baby for a couple of days a week.

I haven't looked in too much depth at benefits (don't know where to start as I've never claimed any benefit in my life), from what I can see we will get the Statutory Maternity Pay while my partner is on leave and £20 child benefit a week.

I don't think my partner would benefit from leaving work and we may struggle to much to pay our way if that is the road we walk.

i could be wrong but i think at a joint income of less than £45K you may be entitled to tax credits or whatever they are called now, worth investigating.

Also if yu have free child care through family i agree it would make sense for your partner to keep working, however if you have to pay it gets expensive

There is also the quality of life thing to consider in that mum spending a good chunk of time with new born baby is precious and something you can never get back.

As someone above says in my experience babies only cost alot IF you dress them in GAP etc. they are pretty cheap things really plus your outlook and lifestyle will change anyway, less going out and you msy find your not interested in sports cars and fancy clothes anymore (a shirt covered in puke is a shirt covered in puke, regardless of who designed it)

Good luck!

atush

Have you joined your work pensions?

xylophone

Congratulations.

Look into life insurance.

Make sure that your current account pays interest - look into Santander 123 and TSB Classic Plus.

Make a list of all your essential outgoings - are there any savings to be made?

Where is the rest of the money spent? What can you do without? ( No need to deprive yourselves of a weekly treat - it's a case of cutting out the indulgences.)

RTC87

atush wrote: »

Have you joined your work pensions?

Hi,

No I'm not currently in a pension scheme. Something I will look to do over the next few years. Currently we are focused on saving for baby and then a deposit for a house.

xylophone

No I'm not currently in a pension scheme.

Does your employer offer a scheme? Does your partner's? If not, they will soon have to.

https://www.gov.uk/workplace-pensions/about-workplace-pensions

If your employer contributes you are giving up free money by not joining.

Don't forget the tax relief. And should you be entitled, or become entitled to tax credits,

"The effect on your tax credits, income-related benefits, or student loan repayments
Joining a workplace pension scheme means that your take-home income will be reduced. But this may:

mean you’re entitled to tax credits or increase the amount of tax credits you get (although this may not affect your tax credits until the next tax year)
mean you’re entitled to an income-related benefit or increase the amount of benefit you get".

RTC87

xylophone wrote: »

Does your employer offer a scheme? Does your partner's? If not, they will soon have to.

https://www.gov.uk/workplace-pensions/about-workplace-pensions

If your employer contributes you are giving up free money by not joining.

Don't forget the tax relief. And should you be entitled, or become entitled to tax credits,

"The effect on your tax credits, income-related benefits, or student loan repayments
Joining a workplace pension scheme means that your take-home income will be reduced. But this may:

mean you’re entitled to tax credits or increase the amount of tax credits you get (although this may not affect your tax credits until the next tax year)
mean you’re entitled to an income-related benefit or increase the amount of benefit you get".

I will look into it. I'm pretty sure mine doesn't as we're a small agency, my partners may though.

I just did a tax credit calculation and it says we are ineligible as we have a combined income of £45,000... sigh.

atush

RTC87 wrote: »

I will look into it. I'm pretty sure mine doesn't as we're a small agency, my partners may though.

I just did a tax credit calculation and it says we are ineligible as we have a combined income of £45,000... sigh.

If either of you has not joined the scheme (and regardless of size the employer HAS to provide one in Law) Then you are flusing away money down the toilet. throwing the baby out with the bathwater- whatever term you would like to use.

I get babies are expensive ( I had twins after 1 and had to buy essentials twice) however babies, children etc do better with parents who do the best for the family's long term benefit. And for the parents to be debt free, and at least a small emergency account, and pensions thru their employer is best. Add in your own home and you are in true stability.