The housing Ladder.....

[manzi18]

Even though a life free of being a mortgage slave and the tedious worries about rotting windows and crumbling gutters might sound very appealing, independent studies have shown that it costs nearly £200,000 more to remain a tenant for life than to become a home-owner!

It is more important than ever that the younger generation become more financially minded in order to get on the housing market. Some of the younger generation are lucky with the bank of "Granny and Grandad" or who have parents that have planned and been successful with the financial future for their children. Unfortunately for most there is no financial support in starting out on the housing market.

If you had the knowledge of today but re winded your life, what financial advise would you give to yourself.....??

My top two to myself would have been:-

1. Not keep up with the Jones'..... 'Allocating time and money in the pursuit of looking superior often has the predictable outcome: inferior economic achievement'. Buy Assets. Assets provide an income, liabilities don't!!

1. Be Frugal..... this is the number one way to make your money go further. Make your own lunches, don't buy expensive clothes, and never buy new cars, and especially don't borrow money that you don't need.... car loans are one of the biggest destroyers of income that we see...

I agree wholly with both of those.

I had very good financial advice from my hard-working, non-borrowing parents. Didn't always take it, mind.

1. Don't buy what you can't afford. Save up instead.
2. If you run out of cash, don't ask us for any.
3. Don't lend money to friends. They won't be friends when it's time to pay you back
4. (From my Mum) Never put your financial future in the hands of a husband/partner. Always earn your own money & have a bit put by for yourself.

The last one I did listen to and it saved my life.

I agree cogito women are way too ready to hand all the financial power over and rely on the marriage certificate to get them out of trouble and it rarely has all the answers once the children are grown up

Agree. I am frugal (stingy!). And have never ever been interested in keeping up with the Jones's. I just do my own thing and so far am doing ok. Have had luck on my side a few times too which always helps.

I agree with being frugal, and also what Cognito's Mum and Dad said

I think the saying "Look after the pennies and the pounds will take care of themselves" is not a bad one to keep reminding yourself of.

I agree with your list. Apart from buying new cars can be good, if you have the cash to pay for it, and you pick your time. You can get huge discounts, and benefit from long warranties etc.

Don't borrow money (except maybe a mortgage) - save for it rather than pay interest for it.

I think there is such a thing as a good debt tbh.

Most people dont have the cash for a house/car/education outright.

I think the following are exempt from being called a bad debt;
mortgage
car (reliable, presentable car is essential for some)
further education (uni etc)

Do you agree?

(tries desperately not think of the cc debt she has atm!)

I isagree about the car. When it comes to cars, you should buy what you can affor rather than getting a loan on a new car that you end up paying much more than the price of the car for.

There is no need to buy new cars when there are plenty of second, third or fourth han cars out there at much more realistic prices.

When would a presentable car be so essential that you had to buy one new (unless you were a taxi driver or driving instructor)?

If you absolutely have to have a car but have no cash for one, then a loan for the cheapest car you can find that is reliable would do, then when you've made and saved some money you upgrade and so on and so on.

I agree about being frugal. It is very important.

plenty of taxi drivers and driving instructors about!

Is it best to buy a second hand car?

I need a car, can't really afford one but I need one for work. I was thinking that a with a new car I won't have to worry about maintenance costs. A second hand car might fail it's first MOT and I will be stuffed.

My first car was an old Fiesta, cost £1,000 and then had to stump up another £500 before I could get it on the road. failed every MOT.

My next car was a brand new Citroen had a 3 year warranty, I owned it for about 6 years and never spent a penny on it.

My Granddad used to say 'Always buy the best you can afford' and I do to a degree. Most of my expensive purchases have not been a false economy.

Bonnie yes, if you can't afford a new car of course it's better to buy a second hand one!!! Not all second hand cars will need expensive repairs on them within the first year of you owning it. Not every second hand car fails every MOT.

You just need to set yourself a budget and find the best car you can within that budget.

Overmydeadbody. I think I'm scared of buying a second hand car because I'm forever hearing of friends spending a fortune on car repairs.

I can't really afford any car but it is a bit of a chicken and egg situation with my job. Dh suggested leasing a car but that seems a complete waste of money. I can buy a car on Finance for roughly the cost as leasing one.

Forgot to say that I was probably going to get a second hand one anyway, just feeling very nervous! I will start a thread to see if anyone has any tips on second hand cars.

can you get a new used one from car giant type places?

I ve always bought second hand cars no problem. But always from a reputable dealer.

Totally agree. When I had my first mortgage I cycled to work on a second hand Raleigh Shopper (for about 4 years) because I couldn't afford the bus fare and I took my own sandwiches in, too.

I took home £600 per month and £300 of that went on the mortgage.

And it was a shared basement flat in Hackney with two tiny single bedrooms.

Thing being Bonnie - in your example, paying out £1000 for an older car, then £500 for your MOT work, still only comes to £1500. You won't get a new car for anywhere near that amount. We have old cars (currently on a 1997 Micra) that cost a few hundred pounds. tbh, if something does go drastically wrong, then it's still saved a huge amount to go out and buy another, compared with having paid out 10x the amount in the first place. Generally, though, if you go for something reliable like a Micra, odds are it's not going to cost you a lot, but if it does, it doesn't 'owe' you anything.

We bought a second hand car (Ford Focus diesel, 35,000miles, 3.5yrs old) from The Car Shop last year for £7,000 (not on finance, saved up, much cheaper in the long run) and the vast majority of the cars they have for sale are ex lease/rental cars that have been hired by companies.

This means that the car has always had it's annual service and been maintained to a much higher standard than perhaps Mr Jones who lives next door would have done, had it been his car. You get a much better idea of what you're buying than a car that has been bought from a garage forecourt when you have no idea who's been maintaining/not maintaining it.

Although I did find that the aforementioned company were pretty pushy when it came to buying it outright, they really tried to get us to buy it on finance and seemed quite suprised when we wouldn't. After the third time of me explaining that it would cost us at least 50% more overall if we bought it on finance than if we paid outright, they eventually got the point!

Cogito - totally agree with your advice and particularly no 4. Earn your own money ladies - I've always felt that having to ask your husband or to get an allowance infantilises you. And I suppose it's not always true but surely you treat someone differently, with just that little bit less respect if you know they have no money of their own and would find it hard to leave?

1. For me I wish I'd known that it's not the big important purchases that lead to trouble because these are more likely to be the ones that you think about - but the frittering. You can fritter away a ton of money on little things, delicious things, pretty things. As financialwizard says, a good, expensive purchase that you've thought about carefully is rarely a false economy.

1. Learn to budget. I once kept a diary for a month and was gobsmacked at how much was going on coffee, sarnies, magazines

1. Live on a cash economy. It's so easy to hand over a card - harder to hand over a bunch of notes.

Martin Lewis has written a terrific non patronising article aimed at teenagers - all about how to handle money.

images2.moneysavingexpert.com/attachment/teen_cash_guide.pdf

1. pay off as much of your mortgage/loans as you can. This is your top priority. Everything else is insignificant.

2. Put more than you think you can afford in to your pension. Struggling for money when you're in your 20s isn't pleasant, think how awful it will be struggling for money in your 70s.

oh yes cogito Great one, never be financially dependent on anyone... that's a great one!

Buying a small car new can be a good deal I think - especially if you can get 0% finance and a full warranty/service deal thrown in.

I bought my current car 2nd hand from the dealer, it was about 18 months old so still had some warranty and didn't need an MOT until I had had it for almost 2 years.

Definitely agree about watching pennies, but there is also such a thing as a false economy.
There are certain things where I always buy the best quality I can afford, because otherwise you are continuously replacing.

Never use unsecured debt. That would be mine. I wish I'd learned it years ago.