Atrixa's Saving Diaries

atrixa · 25 September 2017 at 7:59PM

Hello everyone! I'm 26 years old and currently renting a 1 bed flat in the North East of England. Due to not having a great income, I always thought I'd be renting forever but luckily, the North East has some of the most affordable (If you can call anything over £50k "affordable") properties in the country that aren't complete hovels. I've decided that I'll attempt to be buying my own home by the age of 30.

After doing a bit of long term financial planning, I'll need to be rent and mortgage free by retirement to be able to retire at all with my company's not-so-great pension, and who knows where SPA will be by then? Better to start now and not fritter my money away.

My current outgoings currently include:
A credit card with a balance of £57 and some change. It was a few hundred quid, but I've been working at it for the past few months and I'll have this paid off on payday. I'll try not to touch it ever again.
A Hitachi Finance loan. It's interest free at just over £2000. I've made 8 out of 15 payments of £129.
A Barclays Partner Finance loan. Also interest free. It's £16.60 per month for 30 months and I started paying in March, I think.
Student loans. These only ever get paid when my overtime tips me over the repayment threshold and it's not much.

I'm not too concerned about the debt at the moment. I can make the minimums easily and none of them are accruing interest. I'd much rather put money in savings where it can earn me interest instead.

So, my goals:

1) Save £500 for a starter emergency fund.
2) Save into a Help to Buy ISA once Hitachi Finance paid off. I need approx £5,650 saved to get 25% bonus for £70,000 house. (around a 10% deposit)
3) Save into a high interest savings account for other mortgage/home costs (fees, decorating, removal etc.) I reckon around £3,500 should do it. I had a look at the article on here and that should account for all the basic costs.

I've worked out that based on my current income, which will hopefully increase soon, it'll take 3-4 years to get the money together. Looking at the figures people in other parts of the country are quoting, I'm thinking myself lucky. :eek: Hopefully somewhere in there I'll be able to knock my pension contributions up to at least 10% (currently at 6%) and I'll be on my way to a secure future.

Wish me luck! :j

Skint_yet_Again · 26 September 2017 at 5:14PM

Good luck ! I look forward to seeing how your savings grow.

worried_jim · 26 September 2017 at 5:17PM

Why is your company's pension not so great?

atrixa · 26 September 2017 at 8:51PM

Likely because they administer for the industry and appreciate how much decent ones cost.

Hopefully the government will raise the minimum employer contributions eventually but I won't hold my breath.

worried_jim · 26 September 2017 at 9:44PM

Simply pay more in yourself, at 25 now is the time to do it! With comounding on your side you should max what you can - you won't regret it.

atrixa · 27 September 2017 at 6:41PM

Erm, thanks for the advice? I work in Pensions. There's only so high I can raise the contributions before it impacts too much on my budget.

Anyway, credit card is now paid off. I've managed to put £88.80 in my savings account. Been empty for about 2 years. Hopefully I'll fill the emergency fund in about 4 more months.

savingwannabe · 27 September 2017 at 9:33PM

Hello Atrixa, please don't worry, Mr Worried Jim is one of the most intelligent people on MSE. He's a total legend. He knows his stuff. I ask him for help on many an occasion and he has always come up with the goods.

Well done on starting a pension anyway. That is great news. Well done on paying off credit card and on posting. I meant to post earlier this week but it has been a bit manic here.

Keep posting and we will be happy to cheer you on. Hooray to a lovely new diary. :beer::money::beer::j:D:T:)

nyc_451 · 30 September 2017 at 8:43PM

Will be interesting to follow your journey, good luck

Just curious, how come Help To Buy Isa and not LISA?

CheBee · 30 September 2017 at 9:16PM

Good luck, please do keep us updated

atrixa · 8 October 2017 at 6:40PM

Thanks all!

blue_mango wrote: »

Will be interesting to follow your journey, good luck

Just curious, how come Help To Buy Isa and not LISA?

I was under the impression (can't remember where from now) that a Help to Buy would be the better option. I've looked into it again in the past week and now I'm not sure. This site states that there is only one LISA account (Skipton), that has an interest rate of 0.5%. Help to Buys are offered by many places, like Darlington Building Society, which has a pretty good interest rate, although that could change.

However, if I were to go with the LISA, I would be able to use the account and therefore the cash bonus for both deposits, unlike with the Help to Buy.

I wonder if it's likely that many banks will jump on the LISA bandwagon any time soon?

nyc_451 · 8 October 2017 at 7:17PM

atrixa wrote: »

Thanks all!

I was under the impression (can't remember where from now) that a Help to Buy would be the better option. I've looked into it again in the past week and now I'm not sure. This site states that there is only one LISA account (Skipton), that has an interest rate of 0.5%. Help to Buys are offered by many places, like Darlington Building Society, which has a pretty good interest rate, although that could change.

However, if I were to go with the LISA, I would be able to use the account and therefore the cash bonus for both deposits, unlike with the Help to Buy.

I wonder if it's likely that many banks will jump on the LISA bandwagon any time soon?

Maybe it depends on circumstances... My savings in help to buy isa aren't that big and I'm intending to use them after a year anyway, so not losing out much on low interest rate. I was under impression that I could increase my bonus by transferring the money before April 2018.

''The impact on your LISA allowance of transferring a Help to Buy ISA in depends on when you contributed. All money contributed to a Help to Buy ISA before LISAs launched (ie, before 6 April 2017) can be transferred in without affecting your LISA allowance – and you can get both the max £1,000 LISA bonus, plus the bonus on that Help to Buy ISA cash on top. Any money you contribute to the Help to Buy ISA after LISAs launch however will eat up!your LISA allowance. "

https://www.google.co.uk/amp/blog.moneysavingexpert.com/2016/07/25/24984/amp/

But I'm not expert, I may be wrong

Atrixa's Saving Diaries

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