Wanting to rent first property but very low income.

UnknownTerritory

Hi,

I am 18 years old and have been with my partner, who is 21 years old, for nearly two years, we want to take the step to move in together. At the moment we are doing a trail run of living together in his mums house before we try the real deal. At the moment I'm working about 30/40 hours pw on £7ph whilst my partner is doing about 37.5 hours pw on £7.29ph, we are trying so hard to save up but my partners outgoings amount to so much of his monthly wage that he really doesn't have much afterwards, and this is paying £100 rent to his mum. My outgoings amount to considerably less so I'm left with the most money out of the both of us. We aren't able to save as much as we would like to, we very nearly got to £1000 but after my partner was signed off work for a month, he had to utilise our savings to pay off his bills whilst on statutory sick pay.

I'm thinking of taking out a loan to start of the step on the renting ladder to pay our deposit, however I am concerned that we wouldn't be able to pay the loan and the rent. I'm completely stuck on what to do, I've asked my manager for extra hours but due to poor sales in the store where I work hours are extremely tight.

If anyone could offer advice, I would be so grateful x

pyueck

Unfortunately no easy answer. Can your boyfriend reduce his outgoings? Can either of you do any training to increase your wages?


Clearly it's up to you but I would suggest that you should do a bit more saving while staying at home. Taking on debt to pay the deposit etc, might not be a great idea as you haven't been able to save much before living at home, so doing so while paying rent, bills, council tax and paying back the loan could leave you in a bad situation. Best of luck!

UnknownTerritory

Hello Pyueck,

Thank you for the reply, my partner's outgoing consists of his loan (which he took out for his car, when he was 18, but still has about £3,000 to pay off) life insurance, car insurance, life insurance, petrol, phone contract and finally account fee for his bank account. We have debated paying off his phone contract as that's £40 per month. We are just stuck in a tricky situation, I've even debated taking a second job but after the 40% tax I partially wonder wether it would be worth it.

Thanks again

pyueck

Well not really sure why he needs life insurance with I assume no dependants or why he has a paid bank account. Also you wont be paying 40% tax until you are a higher rate tax payer, over £40k. In short you need a period of spending going down, income going up and saving money. Sounds like you are starting from a position of debt, with a poor record on saving. Focus on this first.

UnknownTerritory

Thank you again Pyueck again, with regards to his life insurance it is through his bank who use Scottish Widows as their provider. Do you know if there is any penalties to leaving to life insurance policy?

pyueck

You should read the policy. Also please don't just cancel on my advice, think about why you bought the policy and whether it offers you good value for money.

UnknownTerritory

He got the policy as my mum passed away very young leaving behind debt, we weren't able to even buy her a tombstone, he said that he didn't want to risk anything happening like that, so he took out the policy, I do understand what you mean though as it is just him and I (and obviously his family) we don't have any children

ellesbellesxxx

Hi there,
Just to say please please don't get a loan out... Renting a house is so expensive and you will be adding more expense by doing that.
When you say your bf's bank account fee... What does the fee entitle him to? Is it worth it? Could he cut down his car or life ins by switching?

ellesbellesxxx

If he is half way through mobile home contract they should b able to reduce tariff?

[Deleted User]

I know its hard, but use this chance to look at ways of saving money. Post on the debt free wannabe board .

Taking out a loan to pay deposit and first month's rent in order to pay hundreds of pounds a month MORE on rent and bills, is just not workable if you aren't able to save these yourself (haven't got the money to save, how will you find the money to pay more out on basic things you need to pay if living independantly).

Taking out a loan because you can't afford something is always a risky proposition. Paying the loan back (with interest) is always going to make things worse if you don't sort out the problem causing the shortage of funds.

This is as chance for you to look in detail at your budget, inspect every debit and find a way to make savings or cut things you can out. Do either of you go out? Can you cut that? Do you buy consumables (gadgets or not really desperately needed stuff)/clothes? Can this be cut back? Do you make sandwiches for work instead of making them., buy coffee etc? Do you HAVE to have a car?

If you can't alter your income, you have to look at spending.., and making compromises to get to your goal. This will help you all through your life.

I won't even suggest looking at renting a room, because its little different to what you are doing now.., and way more expensive.

If you want to get another job.., have you looked at Bar work, evening waitressing etc. Its how I used to make extra money before I had children.

Pixie5740

I wouldn't be so quick to throw your lot in with someone who can't manage his money properly just yet. £40 for a mobile contract and another £3000 left to pay on a car loan?! What kind of car did he buy when he was 18?

Don't borrow money to pay for a deposit, just keep saving and get him to budget properly and save too. In addition to your deposit and first months rent you also need to build up an emergency fund of about £1000. What would happen when you're renting and your boyfriend becomes ill again? You need something tucked away for a rainy day.

Have a joint tenancy with someone is a big financial commitment as you'll have joint and several liability for the whole rent, not just have of it.