We're aware that some users are experiencing technical issues which the team are working to resolve. See the Community Noticeboard for more info. Thank you for your patience.
📨 Have you signed up to the Forum's new Email Digest yet? Get a selection of trending threads sent straight to your inbox daily, weekly or monthly!

Planning for the future?

Options
Hi!

First time poster on here so hopefully you guys will be able to give me some lovely advice!

How do you all plan for the future? I'll give you a little bit of background...I'm just about to turn 23 and bought my first house just under 18 months ago (inheritance from grandparent and savings meant I could put down a good deposit). My house needed a fair bit of work doing to it which has meant that I haven't got any savings currently, but it's almost finished so I'm really wanting to start saving for my future.

I live alone, although I'm looking into the possibility of renting my spare room out to give me a bit more cash, and at the end of the month after bills/living expenses/mortgage etc I have about £300 spare. I transfer this to a savings account so every month my current account goes back to '£0' just before my next paycheck comes in.

I have 3 bank accounts:

1. Current account (pay check comes into this and it's used for general living expenses e.g. food)

2. Bills account (£600 per month goes into here via standing order and this covers all bills/council tax etc)

3. Savings account (any money left over at the end of the month from both current and bills accounts go into here)


Does this seem like a sensible way to do things?


I'm open to ideas! I have no credit cards/loans (apart from student loan but i'm under the threshold so am not worrying about that!) so no debt - and that's the way I like it :j Is £300 a month a good amount to be saving? How do you budget so you save as much money as possible during the month?

Thank You!

Comments

  • Lungboy
    Lungboy Posts: 1,953 Forumite
    Part of the Furniture 1,000 Posts
    On the last point, head over to the Debt Free Wannabe forum, there are experts there in budgeting and making the most of every penny.
  • Tcquins
    Tcquins Posts: 65 Forumite
    Sounds like you are quite methodical with your savings set up and in a very good position financially.

    If you have a lodger that is up to £7,500 of Income you can have per annum tax free.

    With your savings you need to think about what your next likely expenditure will need to be. Wedding/big holiday/long term goals?No need for a Help to Buy ISA or LISA since you have the house ticked off.

    As fantastically dull as it sounds pension contributions should be a consideration for you. The sooner you start contributing the less you need to pay in when you!!!8217;re older.

    ISAs for a long term investment could be sensible- perhaps stocks and shares.

    Your mortgage; could you overpay and reduce your costs, and possibly be in a position to remortgage with a cheaper interest rate.

    Finally, make sure you have an emergency fund built up so you can cover any big one-off unexpected bills, boiler, car etc. 3-6 months worth of expenditure at a minimum.
  • Eco_Miser
    Eco_Miser Posts: 4,848 Forumite
    Part of the Furniture 1,000 Posts Photogenic Name Dropper
    kajabe wrote: »
    Does this seem like a sensible way to do things?
    No. It's not a stupid way, but why have a separate bills account, and why zero both current account and bills account every month?
    Use an interest paying current account (or several if your savings would justify them) for all three functions, with a Regular Saver taking some of the accumulating savings.
    Using Nationwide would get you 5% AER on up to £2500 in the current account for a year, and up to £250 a month in the regular saver (renewable each year until further notice).
    Eco Miser
    Saving money for well over half a century
  • JmeS
    JmeS Posts: 9 Forumite
    Third Anniversary
    I'd swap accounts 1 and 2 slightly. Have your income go into your billing account, then move what you need for the month into your spending account.

    It'll mean having more of a budget to stick to rather then what you have left after bills is what you have to spend.
This discussion has been closed.
Meet your Ambassadors

🚀 Getting Started

Hi new member!

Our Getting Started Guide will help you get the most out of the Forum

Categories

  • All Categories
  • 350.9K Banking & Borrowing
  • 253.1K Reduce Debt & Boost Income
  • 453.5K Spending & Discounts
  • 243.9K Work, Benefits & Business
  • 598.8K Mortgages, Homes & Bills
  • 176.9K Life & Family
  • 257.2K Travel & Transport
  • 1.5M Hobbies & Leisure
  • 16.1K Discuss & Feedback
  • 37.6K Read-Only Boards

Is this how you want to be seen?

We see you are using a default avatar. It takes only a few seconds to pick a picture.