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  • FIRST POST
    bp5678
    Have I been saving well?
    • #1
    • 13th Sep 18, 11:40 PM
    Have I been saving well? 13th Sep 18 at 11:40 PM
    I am 24. I graduated University 2 years ago. I earn 25000 per annum.

    I have 8000 in my bank. It would be twice as high but I had to buy a new car (my previous car was literally on its last legs and I decided I should buy a car outright than pay more through interest on finance).

    I save about 750 a month (although it's been worse recently). I pay 300 rent living at home with family.

    Because I went to University I have my student loan to pay back. It was about 45000 however it's now gone up due to interest to nearly 47000.

    Also on a side note, would you consider my "savings" to be 8000 as this is what I have in my account or would you consider it to be a negative number (-39000 due to taking into account my student debt).

    I was thinking about getting on the property ladder as quick as possible in order to gain future wealth (ie an investment) however part of me also thinks I should be trying to clear my student debt as quickly as possible. Where would be best to put my money into?
Page 1
    • DrEskimo
    • By DrEskimo 14th Sep 18, 12:12 AM
    • 290 Posts
    • 210 Thanks
    DrEskimo
    • #2
    • 14th Sep 18, 12:12 AM
    • #2
    • 14th Sep 18, 12:12 AM
    Yea sounds like you are doing well to me. You are saving a good proportion of your income, and whilst the new car purchase has certainly pushed you back a little, it's not a ridiculous sum of money relative to your income, you paid cash and you have no other 'consumer' debts (credit cards, loans, etc.) to worry about by the sounds of it?

    You are slightly older as a recent graduate though? Did you take a year out, or was your degree 4-years?

    I wouldn't worry about the student debt at all. It is best thought of as a graduate tax rather than a debt. You only pay back when you can afford to, and it doesn't stay with you forever. Hopefully you will use it to earn more than you would have had you not gone to uni, so should be a worthwhile investment, even if it does pinch a bit of your income each month for the next 10/20/30years. Presumably you have good prospects for increasing your earnings in the next 5years?

    From my experience, I would get on the housing ladder ASAP. I started saving when I graduated and was living at home. I was fortunate in that I had met my partner at uni, so we both saved up for a decent deposit and bought our first place together when we were 25. Obviously the amount depends where you are looking to buy, and whether you are looking to buy with someone, but the quicker you can save and buy, the better placed you will be in the future IMO.

    Keep at it
    • Alexland
    • By Alexland 14th Sep 18, 12:12 AM
    • 3,597 Posts
    • 2,926 Thanks
    Alexland
    • #3
    • 14th Sep 18, 12:12 AM
    • #3
    • 14th Sep 18, 12:12 AM
    Don't worry too much about definitions you clearly have a view on your savings, debt and resulting net worth.

    I wouldn't worry too much about the student loan for now but take advantage of your employers pension and consider using a HTB ISA or more probably cash Lifetime ISA for a 25% government bonus towards the property purchase. Read the terms and conditions carefully as they are slightly complicated products.

    Alex
    • enthusiasticsaver
    • By enthusiasticsaver 14th Sep 18, 12:20 AM
    • 7,280 Posts
    • 15,959 Thanks
    enthusiasticsaver
    • #4
    • 14th Sep 18, 12:20 AM
    • #4
    • 14th Sep 18, 12:20 AM
    If you are saving 8000 a year out of a gross salary of 25k I would say that is good. Investigate HTB ISA if you intend buying a property at some point. I would not worry about your student loan. Just think of it as a graduate tax.
    Debt free and mortgage free and early retiree. Living the dream

    I'm a Board Guide on the Debt-Free Wannabe, Mortgages and Endowments, Banking and Budgeting boards. I volunteer to help get your forum questions answered and keep the forum running smoothly. Any views are mine and not the official line of moneysavingexpert.com. Pease remember, board guides don't read every post. If you spot an illegal or inappropriate post then please report it to forumteam@moneysavingexpert.com
    • bostonerimus
    • By bostonerimus 14th Sep 18, 12:23 AM
    • 2,423 Posts
    • 1,715 Thanks
    bostonerimus
    • #5
    • 14th Sep 18, 12:23 AM
    • #5
    • 14th Sep 18, 12:23 AM
    "Literally on it's last legs"? surely that should be last wheels
    Misanthrope in search of similar for mutual loathing
    • Vet
    • By Vet 14th Sep 18, 11:18 AM
    • 58 Posts
    • 35 Thanks
    Vet
    • #6
    • 14th Sep 18, 11:18 AM
    • #6
    • 14th Sep 18, 11:18 AM
    Sounds good to me. Look at a HTB or LISA (if you don't already have one) if you fancy jumping on the property ladder.
    Keep on saving - you never know when you might need that spare cash!
    • NineDeuce
    • By NineDeuce 14th Sep 18, 11:39 AM
    • 939 Posts
    • 857 Thanks
    NineDeuce
    • #7
    • 14th Sep 18, 11:39 AM
    • #7
    • 14th Sep 18, 11:39 AM
    This seems like simply an opportunity to say 'look at me. I have 8k in the bank'....
    • Paul_DNAP
    • By Paul_DNAP 14th Sep 18, 11:55 AM
    • 296 Posts
    • 355 Thanks
    Paul_DNAP
    • #8
    • 14th Sep 18, 11:55 AM
    • #8
    • 14th Sep 18, 11:55 AM
    Have I been saving well?
    Originally posted by bp5678

    Yep, seems you are doing fairly okay. Some notes though


    Don't look at the balance of your student loan, it's massively irrelevant to your day to day life, all that is really important to you is the repayment of 9% of earnings over the threshold as an extra tax in your payslips eating into your take home pay. Don't focus on paying the student debt - read Martin's guides on here where he explains the rare situations where paying more than the minimum will help. (Clue - it's not you just yet.)


    Also, how's your long-term savings plan shaping up - you may think you're too young to start retirement planning, but it will be useful if you do. Are you in a company pension? Are you taking the maximum benefit from employer's contributions etc.?
    Last edited by Paul_DNAP; 14-09-2018 at 12:00 PM.
    (Although I could be wrong, I often am.)
    • Paul_DNAP
    • By Paul_DNAP 14th Sep 18, 12:02 PM
    • 296 Posts
    • 355 Thanks
    Paul_DNAP
    • #9
    • 14th Sep 18, 12:02 PM
    • #9
    • 14th Sep 18, 12:02 PM
    This seems like simply an opportunity to say 'look at me. I have 8k in the bank'....
    Originally posted by NineDeuce

    This seems like simply an opportunity to say that you don't.


    I read the OP as a genuine request for general advice on basic financial planning, and I think we ought to offer the person a basic level of respect.
    (Although I could be wrong, I often am.)
    • NineDeuce
    • By NineDeuce 14th Sep 18, 12:06 PM
    • 939 Posts
    • 857 Thanks
    NineDeuce
    This seems like simply an opportunity to say that you don't.


    I read the OP as a genuine request for general advice on basic financial planning, and I think we ought to offer the person a basic level of respect.
    Originally posted by Paul_DNAP
    Well how would you know given that I wouldnt rave on about my savings?....
    • Albermarle
    • By Albermarle 14th Sep 18, 12:11 PM
    • 196 Posts
    • 97 Thanks
    Albermarle
    Just in case you were not aware ,if you were looking at getting a mortgage then your student 'debt' is not taken into account , unlike any other type of debt would be . That is because it is not really a debt in the normal sense of the word, as normally it never has to be fully repaid, or not repaid at all in many cases.
    If you were earning enough to start having to pay some back, then the mortgage company might take this into account when looking at affordability criteria, but they do not look at the size of the student debt at all.
    • pearl123
    • By pearl123 14th Sep 18, 12:36 PM
    • 1,457 Posts
    • 2,161 Thanks
    pearl123
    Any savings are better than no savings.
    • ben501
    • By ben501 14th Sep 18, 12:43 PM
    • 413 Posts
    • 693 Thanks
    ben501
    This seems like simply an opportunity to say 'look at me. I have 8k in the bank'....
    Originally posted by NineDeuce

    People must be easily pleased these days if that were the case. If I'm going to brag about something I want it to be among friends & people I know, not random internet strangers.


    Besides, I'd have thought having a car with changeable legs was more of a talking point than the amount of money. Just a pity the OP couldn't get any more.
    Last edited by ben501; 14-09-2018 at 12:47 PM.
    • atush
    • By atush 14th Sep 18, 2:52 PM
    • 17,262 Posts
    • 10,831 Thanks
    atush
    Well how would you know given that I wouldnt rave on about my savings?....
    Originally posted by NineDeuce
    Because you are an idiot to criticise others for asking if theya re saving enough/

    The OP isnt raving, they are concerned they arent doing enough.
    • atush
    • By atush 14th Sep 18, 2:55 PM
    • 17,262 Posts
    • 10,831 Thanks
    atush
    OP, have you joined your work pension? Do you pay in enough to get their max contribution?

    Have you done a budget? Although you are saving well enough, you could save more if you are wasting some of that money (and I dont mean by replacing your car- well done for paying for it w/o finance).
    • grad101
    • By grad101 14th Sep 18, 3:07 PM
    • 18 Posts
    • 2 Thanks
    grad101
    Only thing I would say here is that it looks like you could saving a little more if you wanted to. Does the rent you pay to your family cover stuff like bills and food as well or do you pay that separately? How much does running your car cost?

    I saved around 750 per month when I was on 21k (around 1400 a month after tax) - I was living rent-free with family but paying 400 a month on a train fare.

    Of course you need to live life and do the things you want to when young, but from my experience I would encourage to save as much as you can while you're able to live at home for little rent. I lived with my family for 6 months and traveled into work, and I do wish now I thought more about saving on little things like coffee and lunches out, or not getting that extra drink with dinner when I could (I think I became complacent because I was already saving a good sum each month). Now half my salary goes into housing and travel costs in London and I have to be careful with the small things that add up if I want to save at all!
    • Alexland
    • By Alexland 14th Sep 18, 6:58 PM
    • 3,597 Posts
    • 2,926 Thanks
    Alexland
    This seems like simply an opportunity to say 'look at me. I have 8k in the bank'....
    Originally posted by NineDeuce
    ...'and a net worth of minus 39k'?

    Neither of which are particularly interesting as that's what it's like being a recent graduate living at home and only a couple of years into a career so using your logic more like 'look at me I am exceptionally normal'.

    The two most valuable things the OP has which doesn't show in their current net worth is their future potential to earn and access to low cost accommodation until they can buy property.

    Alex
    Last edited by Alexland; 14-09-2018 at 7:03 PM.
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