What to do with my money - I’m 18

Bostonerimus1

Eco_Miser said:

Bostonerimus1 said:

1) "Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds nought and six, result misery." Mr. Micawber.

Translating that into modern money (we stopped using nineteen and six as a money amount 54 years ago, and there's been massive inflation since Dickens' time):

"Annual income twenty thousand pounds, annual expenditure 19,975, result happiness. Annual income twenty thousand pounds, annual expenditure 20,025, result misery." Mr. Micawber.

Also by Micawber: "Something will turn up".

That might be optimistic, but it's not an organizing principle for your finances IMO.

Eco_Miser

Bostonerimus1 said:

Eco_Miser said:

Bostonerimus1 said:

1) "Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds nought and six, result misery." Mr. Micawber.

Translating that into modern money (we stopped using nineteen and six as a money amount 54 years ago, and there's been massive inflation since Dickens' time):

"Annual income twenty thousand pounds, annual expenditure 19,975, result happiness. Annual income twenty thousand pounds, annual expenditure 20,025, result misery." Mr. Micawber.

Also by Micawber: "Something will turn up".

That might be optimistic, but it's not an organizing principle for your finances IMO.

No, but neither is spending all but 0.125% of your income, although it's better than spending 100.125% of your income. Something bad may turn up. IMO.

Bostonerimus1

Eco_Miser said:

Bostonerimus1 said:

Eco_Miser said:

Bostonerimus1 said:

1) "Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds nought and six, result misery." Mr. Micawber.

Translating that into modern money (we stopped using nineteen and six as a money amount 54 years ago, and there's been massive inflation since Dickens' time):

"Annual income twenty thousand pounds, annual expenditure 19,975, result happiness. Annual income twenty thousand pounds, annual expenditure 20,025, result misery." Mr. Micawber.

Also by Micawber: "Something will turn up".

That might be optimistic, but it's not an organizing principle for your finances IMO.

No, but neither is spending all but 0.125% of your income, although it's better than spending 100.125% of your income. Something bad may turn up. IMO.

The small margin in Micawber's example gives emphasis to the principal of "earn more than you spend".

kempiejon

Of course in the story Micawber set the example of what not to be. He is imprisoned for his debts, is always having financial problems and even gets his mate in to much trouble when he co-signs for Micawber's rent agreement. HIs wife loses all her family's heirlooms but tands by her man.
But he preaches the good principal that living below your means leads to happiness.

thegentleway

The two things I wish I knew at your age would be the power of compounding (I kept all my savings in cash and should have invested the money that was not for short term spending in S&S ISA, and not completely ignore pension) and to give to charity (I delayed giving until I was well off but wish I had started sooner). 

Bostonerimus1

kempiejon said:

Of course in the story Micawber set the example of what not to be. He is imprisoned for his debts, is always having financial problems and even gets his mate in to much trouble when he co-signs for Micawber's rent agreement. HIs wife loses all her family's heirlooms but tands by her man.
But he preaches the good principal that living below your means leads to happiness.

Yes, he teaches a lesson learned from bitter experience. Micawber is in part based on Dickens's father.

ObbessedwithDominos

trickydicky14 said:

QrizB said:

As others say, a lot depends on your plans. £15k in cash seems a lot unless you're planning to buy something expensive soon, you should think about moving some of it into an instant access ISA (as tacpot has already suggested).

Congratulations on having £24k saved at age 18; even allowing for inflation, that's 10x more than I had at your age!

Also, re. your screen name; are you obsessed with dominoes (the game) or Domino's (the pizza company)? It could be either

I could be wrong but at 18 I would say the second one.

You would be right in thinking the second one. I absolutely love a Domino's Margherita pizza, although I'm also frequent player of dominoes! 

ObbessedwithDominos

Stubod said:

..I would not bother with Premium Bonds with £4k, better to out in the best interest account you can find?

I had about a 5 year period of them not winning anything and to my surprise they won I think £400 last year over about 3 months. But it's been very dry since then.

ObbessedwithDominos

Bostonerimus1 said:

You are just fine for now. Use the next few months to educate yourself about your options ie LISAs, stocks and shares ISAs, investment funds and when you start work SIPPs and pensions. Learn something about budgeting and the UK's taxation. Use credit cards carefully and always pay them off at the end of the month and realize that investing and personal finances don't need to be complicated. Here are some things to remember:

1) "Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds nought and six, result misery." Mr. Micawber.

2) "K.I.S.S.", Kelly Johnson

3) "In investing, you get what you don't pay for",

I have a pension with my part time job, although obviously that isn't a lot. In my current situation I think I am quite lucky as my expenses are very little, occasionally snacks, takeaways and petrol. That's probably why I have been able to build up a fair chunk at my age. I think depending on where the next year or so takes me, I am going to focus on just saving as much as possible, thinks like travelling and spending don't interest me so much.

ObbessedwithDominos

[Deleted User] said:

Potentially you should spend the money for experiences when you are young.

You have provided little detail. Others will therefore reply assuming you might struggle to afford a home in future or might neglect to build a pension...reasonable assumptions.

But for all we know you could be on track for a well paid career where building a pension comes easy and you will buy a home in a moderately priced area without a problem.

The point is, there are scenarios where actually spending the money would make sense.

I realised I was quite broad in my initial post. I do have buying a house at the back of my mind, however I am not in any urgent rush to move out of home. I'm not certain where my career will take me, as I am not planning to go to uni. I have considered working at my part time job, full time over summer and maybe for a year just to build up my funds if I don't get an apprenticeship or similar. It's not what I want to do my whole life, but then again it's only for the short-term.