Advice on utilising savings while saving for house

Discussion in 'Money makeover' started by Humpty Dumpty, 3 Nov 2018.

  1. Humpty Dumpty

    Humpty Dumpty Registered User

    Current net salary: 3400 monthly

    Wife net :2600 monthly

    Child benefit :280 monthly

    Total monthly: 6280

    Savings: 114000

    No pensions
    No loans

    2 children 7 and 8

    Outgoings: 1600 rent

    Childcare 600

    Food, bills etc approx 1000 monthly

    Potential 3000 monthly can be saved.

    The obvious option is to buy a house however for a few reasons it may be a couple of years before we do so.

    What can i do in the mean time to utilise my savings?
  2. POC

    POC Frequent Poster

    What age are you both?
  3. Humpty Dumpty

    Humpty Dumpty Registered User

    31 and 37
  4. Bronte

    Bronte Frequent Poster

    Why is buying a house now not an option?

    Also you need to do something about pensions. The sooner you start the better.
  5. gnf_ireland

    gnf_ireland Frequent Poster

    First question I would ask is how much do you plan to spend on your house?
    Then you need to consider timing of the house purchase - what factors are influencing this, and can those factors change at any stage resulting in a rethink? Is schools a consideration? What happens if your landlord decides to sell - how easy will it be to get another place in the same area for the same money? Are you happy in the area you are in?
    The one thing I would say is be cautious about putting off buying a house if you think prices will come down in a few years time. There is (a) no guarantee of this as the current price rise is not linked to cheap highly available credit and (b) you have to consider how likely are you to get a mortgage if there is another major downturn?
    All well as good saying that those who bought in 2011/12 got bargains, but getting a mortgage was exceptionally difficult then and its worth keeping it in mind.

    Regarding utilising your savings more - well the answer is not easily at the moment without taking on more risk, and the risk may not be suitable for your time frames if you wish to buy a house in 2-3 years time.

    The obvious thing to consider is to start a pension fund and avail of the associated tax credits that go with it. Paying 1000 into a pension fund a month would only cost you around 600 euro. Its worth considering, especially since you are roughly within 30 years of retirement.

    Other than that, leave you cash liquid until you decide its time to buy a house as you cannot really risk capital loss in your given time frame