Advice for clueless early twenties.

kteara

Hi guys.

I've made this thread because I have no plan for my savings currently and this is frustrating. The reason being is because I believe that owning a house is near-impossible. I have about 10k saved and I save 500 a month. I will graduate in 2 years time and I'll hopefully land a entry level full time job. I need a plan for what to do after these 2 years are up. I have gone through hell trying to save this much money and I really want to reward myself with a sports car but not at the expense of never owning a house. At the same time, I don't honestly beleive I can ever afford a decent house, let alone a nice one given the prices they are at.

My whole life has consisted of being smart with my money and working towards being successful. One major "problem" is that my biggest joy/aim in life is to own and enjoy sports cars. I know that sports cars are a bad investment but this is what I enjoy MOST out of life.

A crappy 2 bed apartment costs roughly 250k which will need 50k for a 20% deposit and require me to slave away for many years to pay off this said "crappy" 2 bed apartment. Is this really what I will have to look forward to? What is the best thing I should do with my money in a few years? I don't want to go through hell of saving and slaving away for a crappy property and at the same time I don't want to end up staying at home for eternity at the cost of a nice car. What should my plans be right now? I hate not having a plan I can follow because it leads to depression and doubt.

ACG

You clearly cant do both.
If you think with your head, you would probably find some way of getting on the property ladder or saving so when you do get a higher paying job your deposit is more or less in place.
If you think with your hear you will have a sports car.

Only you can make the decision as to whats more important.

Thrugelmir

Do want to pay a landlord for the privilege for renting a property?

Home ownership is a choice. Saving for a deposit requires self sacrifice. The rewards are worthwhile though.

mrginge

Move to an area of the country where two bed apartments cost £100k.

kteara

ACG wrote: »

You clearly cant do both.
If you think with your head, you would probably find some way of getting on the property ladder or saving so when you do get a higher paying job your deposit is more or less in place.
If you think with your hear you will have a sports car.

Only you can make the decision as to whats more important.

Would it be beneficial to get on the "property ladder" as soon as possible by buying a flat as soon as I get a full time job straight out of uni? Or is it more wise to save up till I'm 35 and buy my "dream" home?

6feet

kteara wrote: »

Would it be beneficial to get on the "property ladder" as soon as possible by buying a flat as soon as I get a full time job straight out of uni? Or is it more wise to save up till I'm 35 and buy my "dream" home?

By getting on the property ladder ASAP you will be able to trade up to your dream home when you are 35. You will not be able to save tons when you are paying someone else's mortgage off through rent.

Owain_Moneysaver

mrginge wrote: »

Move to an area of the country where two bed apartments cost £100k.

Move to an area of the country where 4 bed apartments cost £60k and have views of mountains.

Still commutable to Edinburgh and Glasgow though.

Thrugelmir

kteara wrote: »

Would it be beneficial to get on the "property ladder" as soon as possible by buying a flat as soon as I get a full time job straight out of uni? Or is it more wise to save up till I'm 35 and buy my "dream" home?

Chances are you'll never ever be in a position to buy your dream home. Once you've an established job. Get to know the local area then buy somewhere you want to make a home. Chances are you'll move in later life anyway. For one reason or another.

CombatMarmot

I understood that the first question was:

I need a plan for what to do after these 2 years are up.

Unfortunately, from my experience it's difficult to make that financial plan until you have been working for a couple of months after those 2 years have finished. At the moment, I think that the best you can do is ensure you are getting a good return on your savings.

You could certainly gain an understanding of how achievable your goals are by looking at the average starting salary of graduates in your field, the house prices in your area etc. This should consider how much you would have after tax and necessary expenses.

AngelOfTheNorth

You need to think carefully about where you want to and can live. If you're going to want to live somewhere that a bog standard 2 bed flat costs 250k, ie the most expensive areas of the country, no you're not going to be able to do this and pursue an interest in sports cars. Not unless you secure very well paid employment. Your (impressive) current rate of savings will, if you keep it up until graduation, leave you with 22k. Not enough for a 10% deposit on a 250k property, but would be a significant chunk of the purchase price of a home in many areas.

It seems to me that your options are:

- buy a 1 bed or studio in an expensive area
- buy in a cheaper area
- forget about the cars
- choose, if you still can, the most financially lucrative career available and do it for a few years. Accept you won't have the time to pursue hobbies during this period, but have a plan for how to get out, and stick to it. Then use the money saved towards a property and your sports car passion.

I would say in terms of having a nice life, unless you're going to be a mega earner, living somewhere cheap on a decent salary gives you the best quality of life. Easier said than done, of course. But certainly, if you were studying eg physiotherapy, you'd have a better time on a 21-40k salary in Newcastle than Central London. Or more disposable income, anyway.

Clifford29

If your unsure of where to live re cost version location have a look at Doorda.com as it shows local crimes, road accidents and recent property sales.

Good way of having a nosy round a neighbourhood, could save you some time.