[Closed] Money stuff, where to start

Get a friend to recomend a good IFA and get some proper advice.
(Can point you at one in Sheffield, biker as well 😉 )

We are now in a position to start saving around £500 a month and still live comfortably

If I were you, that would mean a new bike in 3 to 6 months time.

HTH 🙂

Short term stick it in an ISA...med term do lots of research, it's not rocket science (not that I'm an expert tho)

You're only 30, plenty time to save etc.

Hubby should investigate what pension options his employer has.
Put as much in as you can afford, see what the employer will match. Remember, pension payments are tax-free.

Have a look at your pension scheme (especially of they are changing it).
Decide whether or not you need to make any changes in order to get back the sort of retirement income you are expecting.

You're only 30 - plenty of time to srot it out without panicking.

Right now just start saving into an ISA at least untill you really work out what you want to do savings wise. If its property then it might take a while to get a house and besides you really need a decent deposit, at least £10,000 probably a lot more.

2 years of decent saving will get you that.

All savings/pensions/houses have risk built into them. You always need somewhere to live so at least a house will get used while you hope the investment slowly builds over 30 years.

Best advice is stop looking on this shittty forum for financial advice!!

wish I could save £500 a month! I'm also 30 (as is my wife) we have a massive mortgage (£860 a month) a new baby and a big loan taken out this year to cover all my wifes debt (£15k).

30 is the new 20! Money comes and money goes, so long as you have a roof over your head and food in your belly, don't painc too much!

£500 a month - that's a deposit in for a house in 3 - 4 years based on where you live and a rough guess at your income.

No point saving, (beyond rainy day funds, anyway) whilst you still have significant debts. I would use whatever amount of your disposable income that you are comfortable with to clear them first, putting you in a stronger situation in the long run. But I'm no expert, check out money saving expert Martin Lewis's website for loads of useful impartial advice and info.

we have a massive mortgage (£860 a month)

Ermm.. that's tiny! Ours is £1500 a month (plus we overpay by another £250).

emma82: definitely start saving for a deposit (after clearing any existing debt). You might be renting "for the foreseeable", but presumably you don't want to be forever.

And don't take [i]"Money comes and money goes"[/i] advice from people with over 15k personal debt! 😉

My first thought is that you have a loan to pay off for another 3 years, but you have £500 that you are planning on saving/month.

Unless the loan is on a stupidly low rate you'd be best off paying the loan early, if it means that you will not pay as much interest on it.
Then start saving.

Or save half of it and use the other half to pay the loan off quicker.

Who would of thought you could get into a willy waving contest over the size of your debt, mines bigger than yours, pmsl.

As i said dont listen to people on here when it comes to financial advice.

grahamS

Ermm.. that's tiny! Ours is £1500 a month (plus we overpay by another £250).

Surely it's relative to your income? If u clear £1200 a month, then £860 mortgage is quite significant.

If you clear £4k, then £1.5k mortgage is but a drop in the ocean...

This site may give you some initial ideas of how to plan your finances:

http://www.moneyadviceservice.org.uk

Who would of thought you could get into a willy waving contest over the size of your debt, mines bigger than yours, pmsl.

🙄 No willies being waved here. I'm just saying that £860 a month is far from a "massive" mortgage.

The average UK house price is £241k.
Take away a 10% deposit and you're left with a mortgage of ~217k.
At 6% over 25 years that'll cost you around £1400 a month.

Surely it's relative to your income?

Fair enough, but my wife assures me that "massive" is not an accurate description of something considerably smaller than average.

Even if it is the biggest that you personally have ever had. 😉

Rubbish, the size of the average mortgage has nothing to do with average house prices.

How about starting with average salaries then go from there.

For your average worker (if there is such thing) then £860 per month just for the mortgage would be a massive chunk of their disposable income.

Rubbish, the size of the average mortgage has nothing to do with average house prices.

Really?? How are people buying these houses then??

For your average worker (if there is such thing) then £860 per month just for the mortgage would be a massive chunk of their disposable income.

Median Household Income in the UK is around £28,400.
So for your average household, £860 would be ~36%.

For someone clearing a household income of £4k, then £1.5k (as in stumpy01's "drop in the ocean" example) is ~37.5%

If you really want to argue the toss, rather than give some sound advice to emma82, then there are all kinds of exciting data tables showing the correlations between income, house prices and mortgages over at:

http://www.communities.gov.uk/housing/housingresearch/housingstatistics/housingstatisticsby/housingmarket/livetables/

Firstly a caveat - I have no particular financial knowledge or qualifications, just an opinion, however....

Don't panic!

30 isn't middle aged, so don't get into a hunkering down mindset. You've got plenty of time to do things with your life.

Despite the fact that there are loads of "experts" out there who tell you that you need to be salting away vast amounts of money into your pension, I don't believe it. I have pretty much zero confidence in financial markets and the ability of pensions providers to act in my best interest or protect the value of my savings.

That said, if you've had a pension since 19 and it has been an essentially painless way for you to save then carry on with that as it's good to spread your risks. My wife is a teacher and has a very good occupational pension, but as we've seen lately even a pension like that is not the "safe" haven that people thought they had been buying into over the years (20 years in my wife's case).

In your position I'd be paying off the loan.

Then I'd be building up a war chest of easily available money - just in case. 6 months salary sounds like a handy amount to have around, which I'd personally invest in premium bonds so I can have a bit of fun with the chance of getting a good return on my money + no chance of losing it.

You might also want to adjust your mindset to how life might actually be in 30-40 years, because it won't be like it is now. My opinion is that global issues such as climate change, resource depletion, population growth, economic meltdown etc are going to totally transform the outlook, so at the least I'd be thinking about how to cut down my reliance on world energy markets - so invest in making your house energy efficient (which may require you buying a house!) - may cost 000's but insulating you from risk. In fact think about how/where you want to live and whether you might need real money to be able to afford to move house in the future without building up more debts.

You might also turn your mind to whether you are really going to retire on that pension you are building up. I don't think I will be, but I'm not really bothered about that - I've got lots of skills that I'm hoping to use to keep working so long as I'm physically able, just in a reducing amount - I don't ever want to "retire"

I've also gone a bit further than many people in the "survivalist" mode - I've an allotment and I grow food, and I'm hoping at some point to move onto a smallholding with utility woodland to hand for fuel. I'm also actively involved in some community groups as I believe that "social capital" is going to become increasingly important as financial capital becomes less important. Work on building up strong relationships, not just strong finances.

If you have kids at some point in the future (if you've not got them already?) you may find that that £500 doesn't go that far.

I expect you've enough to be going on with there for the next few years, but if not I also quite like moneysavingexpert.com as a good place to look for ideas.

Thanks chaps! I think the sight of someone in tears put me in a bit of a panic but guess I shouldn't worry too much.

Re the loan, it is a loan taken out for a specific purchase, we've already paid the interest and if we pay it off early we would be fined against It i think. I checked last night and it's another 24 payments so I think what we will do is keep saving along side the monthly loan so in 24 months that will be 12k plus interest.
Hoping only to be in rented for another three years until the loan is gone. Might check out with the bank whether it's worth overpaying to clear it.

I think I'll ask around about IFAs just for my husband, his work has no provision whatsoever as far as I know or if they do it's not one they make public. Just conscious that for the first time ever husband is becoming more financially sensible (was more Headfirsts approach previously but he never had money so used a credit card then my savings to pay) so need to make sure we get money sorted as quickly as possible.

Oh we each have an isa. The plan is for those to be saved then find a decent savings account

Thank you all 🙂

Edit: 24 months - 2 years not three, I know that .....

My take on pensions is that unless you can fund it adequately to off-set the rapacious charging by the managers, stay away. (I stupidly took out a stakeholder pension and my money is just about staying still but there is no appreciation happening).
Make sure you are using all your ISA savings, have 6 months salary in the bank and then look at pension provision. Be prepared to be very, very confused though when trying to work out what it will cost.

It sounds a cliche, but if you're using an ISA then make your money work for you. Check the interest rates and consider annual bonuses as well. There are some good deals on instant access ISA's at the moment. Don't stick any cash in an old ISA without checking what the current rate is. I had an old ISA which was offering 0.5% interest, which I've now ditched for an online ISA at 3.05% whilst still being instant access so I know I can get money out quickly if I need it.

Lol 30 is nowhere near middle age, you'll only have been working 10 years or so and still have another 35ish to look forward to :p I didn't start paying into my pension until I was nearly 30 and it still seems to go up in value less than my contributions each year so I've given up caring about it. I also have a £25k expected shortfall on my endowment yay :p I've now switched to the 'enjoy while you can' way of thinking and spend most of my spare cash on bike stuff, I figure I can learn how to fiddle the benefits system when I'm 60 if I'm still around, seems to work for a lot of people. Or retrain to be a tube driver in a few years...

...and then when you think you're ok watch the value of your house fall by a third, watch your pension get stuffed, watch your endowment mortgage end up worth less than you pay in, watch your money do that famous magic trick and disappear.

The most important lesson to learn now, is that the people who can take your money will do.

Assuming that the average life expectancy in the UK is 80.1 years then middle age is defined thus:

'Early years' - 0 through 26.7 years
Middle age - 26.7 through 53.3 years
Old age - 53.3 through 80 years

Anyone over 30 who thinks they're not middle aged is either in denial or can't do maths 😉

The Martin Lewis site is worth looking at and talking to an IFA. Do speak to your bank about the loan, you may find it is not worth paying off early because the way interest is stacked.

ISA's is the best way to start but as above check best buy rates. And check every 12 months and move them around.

If company pension schemes is changing maybe a q&a going about and maybe someone to talk to. Take advantage of this even if just to gather info. I paid into a pension from 17 so was worth it for me. Your scheme may be different.

What I learnt was not to put all my eggs in one basket. For instance about 10 years ago I heard China was where the next boom would be so for a couple of years I put my share ISA allowance into a fund specialising in China. Did pretty well! Where is the boom over the next 20+ years? This last para is about risk and what you and Himself are willing/not willing to take. Good luck.

Thanks Ewan. 2 months until I'm old 😥

Ewan - middle age is a state of mind.

I know 20 year olds who are middle aged. I know 50 year olds who still aren't.

Oh, and always wear sunscreen.

Assuming that the average life expectancy in the UK is 80.1 years then middle age is defined thus:

By Ewan.

By Ewan.

By maths 😀

I speak as a middle aged person myself.

One narrow definition sure :p Middle age of your working life is way different, assuming you use 20-65 as the range. Also who says there's only 3 stages of your life? Oh and I'm well into middle-age by anyone's definition so I'm not in denial...

Dont listen to these squares, you've made it past 27. Just spend what you've got, you can't take it to the grave. When the bombs fall, what is your pension going to mean? An ISA won't be able to help you through a nuclear Winter now will it?

Unfortunatly middle age in some areas of Scotland is about 28!!!

I on the other hand intend to live till i am 120+ just to get one over on the govenrment for my pension.

By maths

So Ewan, in history, when would you say the Middle Ages were?

£860 mortgage is massive if you don't have much left after keeping a house above your head.

We bought out house a few years ago, then the backside fell out the market and due to a fixed rate mortgage we didn't get the benefit of mortgages going down that others did. Couple that with losing a job, my wife being made redundant, working part time in any job I could find for little over a year and having to live off credit cards and parents handouts when they could. Now I'm left with so much debt I have no idea how I'm going to pay it off without a lottery win, scouring the web for a second job that will fit in with my current job and spending almost every hour of the day having this hanging over my head.......believe you me, £860 is a lot to some.

(yes, I'm sure a lot was to do with my stupidity and bad money management, but when it's a choice of selling your car that you're still paying for or not eating, decisions are made for you pretty damn quickly)

Tough breaks dogbert - hang in there, and don't forget, it's not much, but you still get to vote and you're still allowed to be politically active without spending any money.

Tough breaks dogbert - hang in there, and don't forget, it's not much, but you still get to vote and you're still allowed to be politically active without spending any money.

thanks, i'm sure it will get better......it just has to. I would have protested with the other 99% if they hadn't been stupid hipsters

Sorry to hear that Dogbert, tis crap 🙁 It's also the kind of situation I am quite scared of one day ending up in hence my mini panic last night.

For those who mentioned about risk - I am definately not a risk taker! Needs to be something nice and safe for me. Well, as much as it can be

"Sorry to hear that Dogbert, tis crap It's also the kind of situation I am quite scared of one day ending up in hence my mini panic last night."

your not alone .....

Dogbert's example is the sort of situation I fear most - had a tough year with the business culminating in a couple of redundancies (me having to lay people off - never done it before and it was horrible) and my aversion to risk is increasing by the day. As I pay off debts I plan on not renewing so when the car is paid for (next month) it is getting run into the ground rather than going out for a new one. Other sad circumstances mean I will be getting a modest windfall that will be paying off part of the mortgage rather than going out and getting new stuff (apart from some glasses - mine are knackered).

Then I see my brother in law just getting a circa. £300k mortgage and his wife *needing* a Q7 'in case the kids want me to drive their friends anywhere'. Yeah right. It just scares me - if their circumstances change (or if interest rates go up to early 1990s levels) they would be royally screwed.

thank you for the kind words. It's nice to hear people not blaming me for every move I've made for once. Could I have done it better? I'm sure I could have......will it get better?? hope so. I refuse to file for bankrupcy or take a trust deed (which you can do here north of the border) because of the effect it has on your credit rating, ie completely knackers it for a good long while. I keep my crediters off my back each month and i'm not in the red with anyone at the moment so that's something to be thankful for.

Then I see my brother in law just getting a circa. £300k mortgage and his wife *needing* a Q7 'in case the kids want me to drive their friends anywhere'. Yeah right. It just scares me - if their circumstances change (or if interest rates go up to early 1990s levels) they would be royally screwed.

Don't get me wrong, it would nice to be in that situation, but one thing i'm taking away from all this is that while it's going good, its fine, but the rug can be pulled out very VERY quickly, and none of these companies throwing money at you turn on their heels as soon as the rug is put away in the cupboard.

Absolutely - the entire family is worried about the risks they are taking every single day. It isn't that he earns loads of money but he has just started a new job and is making reasonable money but they have no savings and (as far as I am aware) no finances/savings accounts in place to provide for their children as they grow up and go to uni etc. They just seem to be spending their money on (as an old boss once said) [i]'fur coats but no knickers[/i]'.

you go dogbert - would be so easy to chuck in the towel !

looking round me n the mrs have a few friends that we go out with regular - one lot have just done the new house , wedding,new car thing as a result of a windfall from family another couple have just done the same on tick - my mrs has spotted this and thinks we can do the same , i may seem like the grinch but im refusing , she understands now ive sat down and explained but you can see why people do it - it does seem attractive short term.

already got one friend thats went bankrupt through over indulgance in fast cars - now his mrs is complaining they cant get a car !

charity shops , gumtree and freecycle for our first house till we get on our feet !

its like everyone forgot the 80s when even the infallible oil industry sucumbed to the issues everyone else had !

charity shops , gumtree and freecycle for our first house till we get on our feet !

I many ways most of us are only a few bad moves away from loosing alot. Job lose or poor health can really change the course of your life.

You just have to believe its going to get better and work your way out of it.

How To Be Smart With Your Money by Duncan Bannatyne.