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  • FIRST POST
    • Nullmoon
    • By Nullmoon 6th Feb 18, 6:19 PM
    • 6Posts
    • 3Thanks
    Nullmoon
    How do I get the most out of the money I've saved?
    • #1
    • 6th Feb 18, 6:19 PM
    How do I get the most out of the money I've saved? 6th Feb 18 at 6:19 PM
    Hi everyone!
    Before I get to the question, I think a bit of background information might be helpful.

    I am 27 and currently have a salary of 22k, which is due to rise to 24k this week. I'm still living at home but I'm looking to move out and rent for a while for personal reasons. As I don't want to house share, I will end up spending around 1k a month after all outgoings, essential payments, spending money etc. Due to this, I'm set to be saving around 300 a month (roughly 20% of my monthly pay).

    Up to this point I've simply moved my spare money from my current account into a cash ISA and letting it build up (currently I have 27k saved up). Obviously this is not maximising the potential of my savings. After doing some research, I've considered the following action plan for my money this year-


    -Max out a LISA to help save for a deposit on a house further down the line (4k)

    -Put 10000 into my pension fund.

    -Keep the remaining money in a cash ISA as an emergency fund and for future plans like a wedding etc. I can also put some of it towards next year's LISA.

    -Switch to First Direct for the joining bonus and...

    -...open up a regular saver with them for the 5% and deposit my predicted monthly savings into this. I can then put this towards either next year's LISA or my pension.



    This is my prospective plan. To be honest I have no idea what is best to save for or how I'm doing so far savings-wise. I know it's stupid to compare as there will always be people who have amassed a lot of money, those who have little savings due to their mortgage, getting married, having kids etc, those who are in debt, and so on. I think it's just reassuring to have some kind of benchmark to work with. Fortunately, the only debt I have is my student loan (which I've read is pointless to pay off unless I'm on a much higher salary).

    My questions/concerns for you lovely people are-


    -Does my plan seem sensible enough? Do you think it covers all potential facets?

    -Is there any kind of benchmark for someone of my age? This is vague as some people are really on the ball regarding mortgages, pensions etc from an early age. Admittedly I've only just started looking into all of this.

    -Going forward is it more beneficial for me to save up for a huge deposit on a house (taking advantages of the benefits of a LISA yearly for however long it takes to move in with my partner), focusing more on my pension (which I have only recently started), or splitting the money between the two?

    -Is a LISA the best way to go for saving a deposit? I understand only Skipton are offering this?

    -Is it worth looking into an additional pension fund? I'm currently enrolled in NEST with my employer.


    The short version - As I'm nearing the end of my 20s, I think it's time to get my finances in order and start the whole process of being a proper adult! Any help would be much appreciated.

    Thank you all in advance!
Page 1
    • Zorillo
    • By Zorillo 6th Feb 18, 6:35 PM
    • 188 Posts
    • 98 Thanks
    Zorillo
    • #2
    • 6th Feb 18, 6:35 PM
    • #2
    • 6th Feb 18, 6:35 PM
    Where do you live? Depending on the property market I'd be buying a flat rather than renting with that sort of deposit.
    • Nullmoon
    • By Nullmoon 6th Feb 18, 6:45 PM
    • 6 Posts
    • 3 Thanks
    Nullmoon
    • #3
    • 6th Feb 18, 6:45 PM
    • #3
    • 6th Feb 18, 6:45 PM
    Thanks for your reply. I'd be looking to move into Birmingham/Sutton Coldfield to be closer to work. Rent is around 550-700 for the kind of places I'm after. I think the issue with me buying is that a) I'd be doing it on my own and b) I'll probably end up moving out in a few years once I settle down with my partner anyway.
    • Zorillo
    • By Zorillo 6th Feb 18, 7:04 PM
    • 188 Posts
    • 98 Thanks
    Zorillo
    • #4
    • 6th Feb 18, 7:04 PM
    • #4
    • 6th Feb 18, 7:04 PM
    You'd gain equity rather than pay rent if you bought. You could then sell up or rent out the flat when you move on to a house.

    I 100% regret the money we wasted on rent in our 20s.
    • TheShape
    • By TheShape 6th Feb 18, 7:13 PM
    • 1,293 Posts
    • 1,103 Thanks
    TheShape
    • #5
    • 6th Feb 18, 7:13 PM
    • #5
    • 6th Feb 18, 7:13 PM
    Pay enough into your pension to gain the maximum matched contribution from your employer. Other than that concentrate on saving for a property through a LISA, high interest current accounts and regular savers.

    I don't think I'd lock away 10k in pension savings when I want to purchase a property in the near future.
    • ValiantSon
    • By ValiantSon 6th Feb 18, 9:02 PM
    • 2,013 Posts
    • 1,863 Thanks
    ValiantSon
    • #6
    • 6th Feb 18, 9:02 PM
    • #6
    • 6th Feb 18, 9:02 PM
    Don't bother with the cash ISA as the interest paid will be rubbish. Put the money into a mixture of interest paying current accounts to get the best return.
    • inflationbuster
    • By inflationbuster 6th Feb 18, 9:09 PM
    • 167 Posts
    • 46 Thanks
    inflationbuster
    • #7
    • 6th Feb 18, 9:09 PM
    • #7
    • 6th Feb 18, 9:09 PM
    I'm still living at home but I'm looking to move out and rent for a while for personal reasons.
    Originally posted by Nullmoon
    Don't do it swallow any pride. Stay home and save, why throw your money down the pan renting?
    • Nullmoon
    • By Nullmoon 6th Feb 18, 9:23 PM
    • 6 Posts
    • 3 Thanks
    Nullmoon
    • #8
    • 6th Feb 18, 9:23 PM
    • #8
    • 6th Feb 18, 9:23 PM
    Thanks for your suggestions!

    -I'll definitely look into seeing if my manager will increase the pension payments along with me.
    -Yeah, the cash ISA is definitely a dud. I'll look into multiple regular savers to get more return.
    -It's not merely a question of pride, hence 'personal reasons'
    • fiisch
    • By fiisch 6th Feb 18, 10:12 PM
    • 285 Posts
    • 162 Thanks
    fiisch
    • #9
    • 6th Feb 18, 10:12 PM
    • #9
    • 6th Feb 18, 10:12 PM
    Just my two penneth but....

    Another vote here for buying a flat. If you meet someone down the line and they too own a flat, when you both come to sell and buy a place together you'll end up with far more money to throw at the new place.

    I'd be loathed to pay rent with that amount sat in the bank, and a back of the fag packet calculation would suggest that you should be able to get a mortgage of 90k (20k / year * 4.5 = 90k mortgage).

    Therefore, allowing for costs, 110k place on your own, or with help to buy you could be looking as much as 135k. I've rounded down your income to 20k in case of any regular outgoings car payments etc....

    The problem is your timescale is fairly short, so investment in S&S ISA etc. is likely unwise. You could cycle the money through high interest regular savers, and put the balance in a decent easy access, but I think if personal reasons are prompting you to move out, really really look at the buying angle.

    24k / year may seem a lot when living at home, but when you're paying rent and other living costs, you will find it hard to save at current rate. At least if you're on the property ladder you'll benefit from house price rises and have the money in bricks and mortar, which is a reasonably safe place to be!
    Save 6k in 2018: 1651.19 / 6000
    • thenewcomer
    • By thenewcomer 6th Feb 18, 10:27 PM
    • 95 Posts
    • 21 Thanks
    thenewcomer
    hey i only started working at 27 yo! (i know so pampared by parents lol- not)

    anyways, i recommend at this market to rent rather than buy. i know i am contradicting with the other forumers. if you are good with investment, you can earn much more than locking your money in a property.
    • Nullmoon
    • By Nullmoon 8th Feb 18, 9:58 AM
    • 6 Posts
    • 3 Thanks
    Nullmoon
    Just my two penneth but....

    Another vote here for buying a flat. If you meet someone down the line and they too own a flat, when you both come to sell and buy a place together you'll end up with far more money to throw at the new place.

    I'd be loathed to pay rent with that amount sat in the bank, and a back of the fag packet calculation would suggest that you should be able to get a mortgage of 90k (20k / year * 4.5 = 90k mortgage).

    Therefore, allowing for costs, 110k place on your own, or with help to buy you could be looking as much as 135k. I've rounded down your income to 20k in case of any regular outgoings car payments etc....

    The problem is your timescale is fairly short, so investment in S&S ISA etc. is likely unwise. You could cycle the money through high interest regular savers, and put the balance in a decent easy access, but I think if personal reasons are prompting you to move out, really really look at the buying angle.

    24k / year may seem a lot when living at home, but when you're paying rent and other living costs, you will find it hard to save at current rate. At least if you're on the property ladder you'll benefit from house price rises and have the money in bricks and mortar, which is a reasonably safe place to be!
    Originally posted by fiisch
    Thanks for going into so much detail, I'll bear this in mind!

    hey i only started working at 27 yo! (i know so pampared by parents lol- not)

    anyways, i recommend at this market to rent rather than buy. i know i am contradicting with the other forumers. if you are good with investment, you can earn much more than locking your money in a property.
    Originally posted by thenewcomer
    Haha someone HAS to be different Thanks for your input!
    • Kim_13
    • By Kim_13 8th Feb 18, 2:10 PM
    • 1,901 Posts
    • 2,035 Thanks
    Kim_13
    You may find the MSE guide to where to start saving useful: https://www.moneysavingexpert.com/savings/which-saving-account

    It includes links to the MSE guides on the best bank accounts and regular savings accounts.

    If you do decide to buy in the near future you should keep current account applications to a minimum, as each one will result in a credit search which would be visible to a mortgage lender (searches take between a year and two years to be removed from your credit file, depending on the credit reference agency concerned.)

    What current account(s) do you have at present? It's worth making use of what you already have via taking any regular savers which they qualify you for and/or converting your account to the best account available with a given provider.
    Sealed Pot 11 #520 ~ /100
    VSP 2018 #9 ~ 19.55/180.00
    CCCC 2018 #1 ~ 20.75/180.00
    • Plus
    • By Plus 9th Feb 18, 12:38 AM
    • 355 Posts
    • 279 Thanks
    Plus
    Something you might find useful is using a small amount of money (that you can afford to lose) as a means of learning how investments work. Think about it a bit like learning to drive... it's a skill that will likely come in handy later. It's really useful to do it over an extended period so you've been through at least one market crash and know what it feels like. There are virtual portfolios that let you do it without spending money, but it's not real unless it's your own cash at risk.

    Though this might not be the best strategy if you're buying a house soon and need every last penny for the deposit.
    • ValiantSon
    • By ValiantSon 14th Feb 18, 2:43 PM
    • 2,013 Posts
    • 1,863 Thanks
    ValiantSon
    Maybe you should try to invest your savings in the cryptocurrency in the trading market. My friend made a long-term investment using an automated platform. He was pleased with it.
    Originally posted by CliffordMiller
    Or you could just burn it instead!

    Seriously, cryptocurrencies are a super high risk proposition. Anyone investing in them as anything other than a speculative bet needs their head read. They should not form a core part of your portfolio.
    • forgotmyname
    • By forgotmyname 14th Feb 18, 6:04 PM
    • 27,214 Posts
    • 10,962 Thanks
    forgotmyname
    Clifford Miller = Spammer
    Punctuation, Spelling and Grammar will be used sparingly. Due to rising costs of inflation.

    My contribution to MSE. Other contributions will only be used if they cost me nothing.

    Due to me being a tight git.
    • ColdIron
    • By ColdIron 14th Feb 18, 6:57 PM
    • 4,258 Posts
    • 5,387 Thanks
    ColdIron
    Yup, built up his post count so he can now post links
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