First time buyer, need advice

Tiddles1991

Hi all,

Myself and my wife are desperate to start saving for our own property but would love some advice on how to help us save properly and increase the amount we can save each month.

A bit about me. I'm 24, my wife is 23 and we have 3 young children. I work full time for a civil engineering company installing new roads and sewers. I take home after Tax around £750 a week so around 3k a month after tax (on a 4 week month), £3750 on a 5 week month.

Our bills are around £2028 a month leaving us £972 a month for days out, kids birthdays, car maintenance, the usual unpredictable bills etc.

We currently have 0 savings as the increase in my wage has literally just happened this month and it's been quite an increase hence the reason we want to start saving for our own place. Before my increase we was lucky to have £200 a month surplus.

I've seen the new ISA which gives you £50 for £200 you deposit which I think we will opt for.

Our rent is currently £650 a month + £150 a month council tax which is obviously the biggest outgoing per month and we was looking at ways to reduce that? Don't get me wrong we could rent a 3 bedroom terraced in what's considered a "rough" part of town for around £400 a month but that's something I'm not willing to do as it would probably cost more in repairs to the car and trouble from the locals. I'm no snob but I wouldn't want me children being brought up in that kind of environment.

What we did consider was possibly purchasing a static caravan outright, we have some lovely local places that you can buy a caravan for around 3-4K. Surely this would help me reduce my bills, I know it's a 3-4K upfront cost but I would get something back from it when we have enough to buy a house? Or is this a bad idea?

Can anybody advise on any better ways to save?

Any help appreciated and if you need to know any
More just ask!

chunkytfg

Biggest 'saving' you can make on the council tax is by opting to pay over 12 months not 10. Its not actually a saving but it reduces the month cost.

As for the rent without asking the LL to reduce the rent of moving out to somewhere cheaper there isn't really anything you can do.

elleJay42

Remember if you and your wife have both never owned a home you can get a HTB ISA each and double what you're saving in it.

MrJB

Firstly, OP congratulations on the pay increase - I wish I was earning 55k P/a at 24!

The ISA to which you refer OP also allows you to make a one off payment in the first month in addition to the normal amount of £1,000 (So £1,200 per month). It is also person specific, your wife can open one and you and therefore get double the bonus. Various banks offer competitive rates of interest (most latterly Santander have upped their interest).

Look at what you're tying yourself into with the static caravan, you may find that you're stuck with escalating fees which you cannot relieve yourself of. There's a famous case of a scheme where the charges doubled every x years and the caravan owners were liable, and obviously unable to bring their liability to an end.

£650 per month for rent does not seem excessive for you plus 3 kids - relative to your income it's not significant, presumably you are also entitled to some other benefits which will top up your income? ie child benefit etc.

If you want to save - just look at what your outgoings are and cut back on unessential spends. Are property prices relatively low in your area (judging by rental prices)? Do you have any fixed term on your current rental property?

mcpitman

MrJB wrote: »

£650 per month for rent does not seem excessive for you plus 3 kids - relative to your income it's not significant, presumably you are also entitled to some other benefits which will top up your income? ie child benefit etc.

Doubt it, I earn the same on a single income and get jack diddly in Child Benefits etc

somethingcorporate

Child benefit is tapered to zero from earning £50k to £60k.

It may be worth the OP in tipping some into the pension to retain this (we do).

Cakeguts

What you have to do is to make a spread sheet and write down everything that you spend monthly onto it. What you want to watch out for are all the little things that you pay for monthly that are only small amounts but add up to big amounts if you put them all together. The kind of thing might be phone contracts and broadband. Each contract might on its own be a small amount but when added together come to quite a large sum to be paying out each month. Then you decide if you really need everything you are paying for.

ReadingTim

There's no magic bullet, but the advice is pretty simple:

- spend less
- earn more

Your earnings are pretty good, so concentrate on spending less, mainly by way of planning and budgeting. Bills aren't unpredictable - they arrive at the same time every month, just like pay day. And birthdays, and Christmases.

Know what's coming in and going out every month, and you can work out what to trim. Sky TV and mobile phones are usually good places to start.

Finally, whilst you might get a bit of stick from the green eyed monsters of jealousy with respect to your income, you might want to get yourself over to the debtfree wannabe board and ask them - post a statement of affairs (SOA) and ask for ways to cut down the spending - there's some good advice dished out there.

MartiMcfly

What about help to buy? you 'only' need to get 5% and the gov chips in 20%, If I was a first time buyer, I'd be all over it

Hoploz

Your outgoings are over £2k but your rent is only £650 ... I don't know where the rest is going but it sounds to me as if there are savings to be made. Do you have debts you're repaying or something? If so this would affect mortgagability.

A caravan sounds an easy fix but is not really the answer. You're on a good salary and you're young. You can do better.

Your wife is v young so in the future when the kids are a bit older she will no doubt go to work as well, so your income will increase further.

mildredalien

Saving for a deposit is a matter of having a clear budget and sticking to it. You don't have to be miser but check every expenditure, see where you can make savings and work out what your priorities are. You may have to spend less on toys, outings or gifts for example to be able to put a decent sum away. Or you could choose to forgo expensive TV packages or holidays. There are lots of savings to be made on utility bills, food and entertainment if you are savvy, there's plenty of advice on these forums to help!

I suppose a starting point could be a bit of research into local house prices and what kind of mortgage you could afford on your current salary. That will help you set a deposit goal (10% is good, 15%+ is better) and don't forget costs and fees. Good luck!