21 with 6k, what shall I do with it?

BrookesAndrew

I am 21 and I have got £6000 saved up at the moment. I feel like I should be doing something with it though. A lot of people I know are going traveling and going on holidays which I haven't been doing which is why I have been able to save up quite quickly. If I am honest I don't see the point in going on holiday, it would be nice for a few weeks but then its back to reality and I would just be looking at my bank account, annoyed at my self for wasting my money.

I do have a credit card which has another year and a half of no interest. That has £900 on it so I suppose I could clear that but I don't see the point and may as well just pay it back monthly as its not costing me anything.

Is the best thing to do just keep saving money and as I get older I am sure I will find something to spend my money on? I did want to buy a house when I am older but I know I am not going to be able to buy a house on my own, I would need to meet someone for that!

brendon

£6,000 is a decent emergency fund sum. Your friends might be the kind that spend every penny they have, but they'll regret that in 10 years. By all means, buy experiences, go on nice holidays, but don't just spend it because you've got it. It's difficult to give advice without knowing how much you are earning, how much you are paying into a pension, when you intend to buy a house, etc.

BrookesAndrew

I earn £18,500 basic but recently I have been earning more with bonuses. Getting around £1750 a month with bonuses at the moment. I know that this is not going to last forever though so I just thought I would save the most of it while I can.

I don't know when I would like to buy a house if I am honest. I did want to get one ASAP but I know that you need to have a lot of money and it's very hard to buy on your own if you don't have a lot saved up and a partner to do it with which I don't.

Dan83

I wasted loads of money when I was younger, holidays, nice car's buying nice things ect, and I don't regret any of it. In a few weeks you may be back to the rat race but a memory or picture can last for ever. The only thing I regret is not doing more traveling.

Don't get to hung up on saving for the future that you forget to live today!

There are loads of banks that you could open to start earning interest, start with TSB and nationwide 5%. You won't have enough for the 4% lloyds account so will have to put the rest in a 3% account like Tesco.

It maybe better putting £4000 at 4% in lloyds and £2000 in TSB at 5%? I'll let you do the maths.

Sorry I don't know any thing about investments.

xylophone

You could start a Help to Buy ISA -

http://www.moneysavingexpert.com/savings/help-to-buy-ISA

http://www.gocompare.com/savings/help-to-buy-isa/


Make sure that you have the best current account (s) for your needs.

http://www.moneysavingexpert.com/savings/savings-loophole?_ga=1.104195015.632060106.1405012823

[Deleted User]

Have you seen the price of houses? Keep saving, £9k is nothing when it comes to home purchasing. Don't worry about spending it.

edit: But still, well done on saving that up!

BrookesAndrew

ringo_24601 wrote: »

Have you seen the price of houses? Keep saving, £9k is nothing when it comes to home purchasing. Don't worry about spending it.

Yeah I know that you need a lot of money to buy a house!

My goal is to get to £10000 and then see where I am then. Traveling does sound really good but I just don't want to come home from traveling for a year and have nothing to show for it and have to start saving all over again when I am say 24-25!

BearWhite

People saying 'they're going travelling is basically another way of saying they're going on holiday for a while'! Not necessarily a bad thing but a year is a long time. Before I had a family I'd go a way somewhere interesting for 3 weeks every year. Meant I kept my job and career moving along, but didn't end up spending loads of cash. So maybe you could consider that?

Experiences are definitely the things that stick with you as you get older. My best memories are all from things I've done with friends and family and have nothing to do with material possessions like cars. Saying that I needed money to do them so it's a balancing act!

tiger_eyes

It's not impossible to buy while single and on a lowish income. You could maybe look at starter flats and low-income housing schemes to figure out how much longer it would be before you can buy on your own. I opted for a two-bed shared ownership flat so I could get some real space on my limited budget, but I could have just bought a little studio flat without needing shared ownership.

You could also budget for a short holiday each year, like a weekend trip to Paris or whatever appeals to you. That wouldn't necessarily put a big hole in your savings and you might find it fun. But obviously, don't spend your savings just for the sake of spending them. Life is a lot more secure when you have serious cash in the bank.

[Deleted User]

I would also say, that you're only young once, and travelling gets a lot harder as you build up 'baggage' in your life. At 21, I went on a 5-week road trip with a few mates, around the USA. It taught me some serious life lessons, and is still one of my most memorable holidays 15 years later.

Sure, it cost about £3k and took a few years to pay off, but I'd definitely say it was worth it. Maybe it was easier to spend as a debt, than money I had worked hard to save up.

Eco_Miser

1. Never spend money "because there's some spare".
2. Never don't spend money "because I'm saving" - unless you're saving for a specific short term objective. Better reasons for not spending are "it's not value for money" and "I don't need it".
3. Decide what you want from life, then cost it out and prepare a budget.
4. Keep your cash savings where they earn the best interest commensurate with the ease of access you need. This thread can help with that.
5. When you have several thousand that you won't need for over 5 years, or a regular excess income that you can put away for over 10 years, consider investing, using the Stocks &Shares ISA wrapper. Monevator is a good guide for that. Start reading now, and you'll be prepared when the time comes.
6. Check the actual price of houses/flats. Round here you've got enough for a deposit on a house.
7. Don't forget saving for a pension - retirement may seem a long way away now, but being able to quit your job 10 years before 'retirement age' will be wonderful then. Also pensions savings have a privileged tax position.

You sound like a natural saver, keep on what you're doing and one day you'll find you have enough for a life-changing purchase.