Entries Tagged 'My Money Matters' ↓

left up arrow - originally posted by Leo Reynolds

I thought it about time for a quick update …  

 

Things are looking up. It’s been a few weeks since a started my new job, since I started this blog and since I wrote my first My Money Matters post. Work is going great, this blog is going better than I ever expected, and my money matters are looking healthier by the day

 

First for the numbers:

 

Debts

 

Overdraft	£1,400	0 % Interest
Student Loans	£9,900
TOTAL	£11,300

 

Savings

 

Mini Cash ISA	£500	5.75 % (Tax Free)
Emergency Account	£9,900	5.26 % Interest
TOTAL	£11,700

 

I’ve been making steady progress over the last few weeks. I’ve opened a Cash ISA and managed to save £500 so far. I’ve also managed to put £100 into my Emergency Account and £400 towards my overdraft.

 

My priorities at the moment are to:

 

1. Contribute the maximum allowed (£2,500) into my Cash ISA before the deadline for this year (5th April).

2. Clear my overdraft before I start having to pay interest (April).

3. Increase the balance on my Emergency Account to at least £1000

 

You may have noticed that the amount I owe for my student loan has not changed at all. Here in England, loan repayments are calculated based on a percentage of your salary and do not start until the April after you graduate. I will start making payment this April, but as interest is calculated in line with inflation, I will be meeting the minimum payments, but my focus is going to be on maxing out my Cash ISA and building up my emergency fund.

 

Let’s just hope the next update is as positive as this one.

 

A Little Bit of Background

I am starting this blog with an almost clean financial slate. The debts that I have, which I will go into more detail on later, are both very low interest and include my student loan. All this does not, however, mean that I have had a particularly clean financial past.

Looking back now on my financial history for the last five years, I can clearly see some serious mistakes that I have made. The biggest of these being;

1. My complete failure to save any money. Even while I was a student, I was fortunate enough to be employed in some reasonably high paying jobs. Added to this, my parents were kind enough to help me with some of my expenses and I also took full advantage of the student loan offered to me (£9,900 over three years). Despite all of this I came of university with no saving at all and the above mentioned student debt. Looking back on it, I spent whatever money I had as soon as it became available on whatever I felt like buying at the time. Moving on to mistake number 2 …
2. My inability to distinguish between ‘need’ and ‘want’. As I’ve already mentioned above I went through tree years of university buying whatever I felt like buying as soon as I had the money available, and sometimes when I didn’t. Not only does this now mean that I have three tone of ’stuff’ that I don’t need, but that seemed like a good idea at the time, it also meant that I was often left without money in the weeks leading up to my next loan instalment being due or when some unexpected expense occurred. Leading me on to mistake number 3 …
3. My unwillingness to make a even make a budget let alone stick to it. I hate to admit it, but until recently I had never had a budget. This was one of the main reasons for often running out of money and never having any money saved. I have more than seen the error of my ways, and a couple of weeks ago I sat down and made a provisional budget. This will need some tweaking over the next few weeks as I am in the process of house hunting in one of the most expensive cities in the world, but it is more that a step in the right direction, and I will keep you posted on my progress.
4. Accumulating significant levels of credit card debt - A few years ago a combination of numbers 2 & 3 led to me accumulating a significant amount of credit card debt. Though I have since managed to clear this debt it caused a lot of unnecessary stress and cost me financially.

Time for a little more about me, and to answer that all important question - what do you owe and what do you earn?

My Current Situation

Debts -

Currently my debts are as follows;

Income -

I am starting my first full-time job on the 1st November, and my annual salary will be £20,000. This means my monthly income will be £1,625 before tax, and around £1300 after tax. There will also be the possibility of receiving a 10% annual bonus. 

The Future

I have now mapped out a basic budget, and will be revising this over the coming weeks as my house hunt progresses. I  will be posting regular updates on my budget and will be also posting a series outlining the steps I took to create my budget, and some of the different methods that have been recommended.

I will also be taking time to look at savings and investment goals, and the best ways of achieving these. I have already made a very small start in this respect, with £500 in a Cash ISA, and £100 in a Instant Access Saving Account,  but my aim is to come up with a clear saving plan and some short and long term goals.

Finally, I will be looking at pension options. I haven’t received the contract through for my new job yet, so am still waiting to see what my company based pension options will be. Once I have this information, I will be in a position to make some more decisions.