Financing college

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Ptak

Guest
Age: 20

Annual gross income from employment or profession: Impossible to predict because of overtime, take home pay of around €40k last year, expect €45-50k this year.

Type of employment: e.g. PAYE

Expenditure pattern: In general are you spending more than you earn or are you saving? Saving most of what I earn. No significant outgoings except motor insurance of around €350 a month. Negligible rent (still live at home).

Other borrowings – car loans/personal loans etc; None

Savings and investments:

1) €1,500 in credit union account. I've started saving €500 a month into this account to build up a savings record in case I decide to get a mortgage in future. Dividend last year was 3% so its not great. I like to keep this account open in case I need a loan for anything at short notice.

2) €25k in current account which I let build up through neglect. Earning 0%.

Do you have a pension scheme? No

Do you own any investment or other property? No

Life insurance: No


What specific question do you have or what issues are of concern to you?

Bit of background;

I plan to go to college for 5-6 years. I'm undecided whether to go in 08 or 09. I reckon I can have 50k saved by October 08, but I don't think that will be enough to last 6 years, so I may work for one more year and go in 09.

I reckon I need around 20k to live off a year when in school (rent will be around 12k). I expect to easily earn 12k a year working part-time for the first three years anyway, but I don't want to be in a position where I have to rely on part time work for the final years because the work load in school could get heavy.

So three main questions;

1) Whats the best thing to do with 25k when I won't need access for 1-2 years and I can top it up by 2.5k a month?

2) Whats the best way to use a lump sum say 50k to live off for 6 years? High interest savings account?

3) Any better ideas on how to finance college from looking at the figures?
 

niceoneted

Registered User
Messages
2,005
Any chance you could study what you want to by night and continuing to work full time. I have been saving like mad to go back to full time education in Sept but on approaching the college discovered they had a new part time course that will have me qualified 2 years sooner ( granded I have an unrelated degree already which is actually going to help me. Worth looking into as I can keep my lifestyle.
Try looking at some of the regular savings accounts for your money or the financial best buys.
 

Satanta

Registered User
Messages
1,574
1) €1,500 in credit union account. I've started saving €500 a month into this account to build up a savings record in case I decide to get a mortgage in future. Dividend last year was 3% so its not great. I like to keep this account open in case I need a loan for anything at short notice.
Firstly, just like to point out this is simply my opinion. If you gain security or confidence from having the CU account, then it's the right thing for you.

Personally, I don't think that the CUs are as beneficial as they [possibly] were in the past. The competition between the main financial institutions especially for student accounts have made instant 1k O/Ds and pre-approved loans with competitive rates the standard.

Given your employment history and saving record, you shouldn't have a problem getting a loan from any of the high street banks through a student account during college should the need arise.

The rates on CU savings accounts are fairly poor (or at best unknown), while the requirement to have savings along side a loan mean the total cost of the loan is [far] higher than elsewhere.

I'd concentrate on building a larger sum with good returns and budget wisely during your college days. If you do need a loan in the future, I'd aim for the high street bank with the lowest rates ahead of the 'flexibility' of a local CU.

That's very much a personal observation and outlook though, not advice as such.
 
F

Flax

Guest
I financed my way through college with a part-time job and no savings. Having a 50k to fall back on is really excellent.

I worked part-time in technical support. It paid me about €300 per week. If you don't drink a lot you can easily live on that, including rent.

I gotta say you sound like a very smart 20 year old - well done.
 

RainyDay

Registered User
Messages
4,506
4k per annum on car insurance is huge - is this down to your age or the type of car? You might have options to reduce this.
 

Thirsty

Registered User
Messages
3,644
paid 1080 for my 18yr old on a full licence driving 1.1l car

(10% discount given to her for having me as named driver on her policy, plus she got a 10% discount for having 1 yr as named driver on my policy)

assuming nothing untoward (claims / points) I'm sure you could better.
 
P

Ptak

Guest
Thanks for the replies... after reading replies plus other threads I put 20k in INBS one year fixed bond at 5.1%. Pathetic return but it should keep me ahead of inflation anyway and at zero effort or risk. Also reduced my savings in the credit union from €500 to €50 a month because of the low dividend.

The insurance is for a car and motorbikes- no way to reduce it short of taking the bus, (already have full licences, full no claims, advanced certs etc.) so not much I can do.

One thing that could be an issue for me though is school fees. There is a possibility I may not be eligible for free fees and this could be fairly expensive...
 

Sue Ellen

Moderator.
Messages
8,403
Any chance you could get your employer to support you for an evening course.

Won't you get tax relief/tax rebate if and when you do have to pay the fees.

Hopefully you have taken the money from the current account. If not and you are with AIB you can redirect it quite easily on internet banking to the 5% available on Online notice deposit 7 day account.
 
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