How does my financial situation look to you?

[financialadvicenc]

Money makes me really anxious, I see it as a security blanket and I just want to know if I'm doing badly or ok? My parents had a weird relationship with money so sometimes I feel my view is skewed. I'd really like some advice on how I could be doing better financially.

Here's the low down:

I'm 25 and a full time student after going back to uni last year. Me and DP own an ex council house together, we were lucky to buy cheap (145k) and do it up, it's now worth about 225k.

I don't work due to my full time placements which are part of my course. I live off my student loan and bursary which equals about £16.5k a year. DP earns £22.5k. I pay 50% of the bills, he's offered to pay more but I prefer to keep it equal as I manage fine.

I have 2 years left of my degree, when I finish I will owe student finance an eye watering £100k (ish) and will pay this off as normal, it will come straight out of my salary. I'll probably never pay it all off! When I qualify in 2 years I will earn 25k for the first year, then it goes up to 30k, then there's increments up to £40k but it takes about 8 years to get to the top.

I do some evening and weekend babysitting which makes me £80 a month, but quite often it's less than this. I've also just joined the bank to pick up some health care assistant shifts for if I have any spare time.

I own my little old car outright but I think it's going to break soon or need major repairs, It's worth about £1k. I'm hoping it lasts the next 2 years till I'm working again! If it doesn't I'd have to look at financing a car in DP's name which he's happy to do, I'm just not keen on the idea.

In savings I have:
£4k in premium bonds
£1k in a stocks and shares isa (set to high risk)
The savings are from before I went back to uni and worked full time. I don't ever touch them.

Literally any advice is welcome. Or reassurance, or criticism. My parents aren't around and I don't really discuss money with friends. Would my savings be best moved elsewhere? Obviously it isn't great that I don't work but it's impossible with my placement schedule. I'm worrying a bit about my pension and the future in general.

I'm also aware that I'm really lucky. We obviously don't have loads of money, but we have enough to ensure we're warm, safe and fed and I'm really appreciative of that.

Many thanks in advance!

I was going to say that your savings don't sound very high but then re-read and saw you own a house with decent equity. You have a decent plan for your career and steps for when you finish your university course and you're managing ok with money in the mean time.

Really, you're doing pretty well for 25 years old. Keep to your career plan and prioritise getting your job when you finish uni and then plan to put a decent amount into savings each month.

It’s so hard for young people to attain home ownership so you’re doing better than most people your age I’d say. Sounds like you’re doing great on your own!

You are doing so well! At 25 I was a student with not a penny to my name.

I'm almost 25 with a baby and no house so you're doing better than me!

Just keep adding as much as you can to your savings to be honest. And when you start working join a decent pension scheme. See people all the time saying to pay in while you're young.

You sound like you are in a good position for the life stage you are at. Lots of stability there. Will you be working for the NHS when you qualify? That should put you in a good place for your pension.

You're doing great. Impressed you have savings at 25. Things to think about - you will automatically be enrolled in the pension scheme if nhs and while the contributions are hefty, so are the employer contributions and its by far the best way to plan for retirement. If you work full time and contribute for 40 years (which you are unlikely to of course) then from retirement age (eg 67) it provides a lump sum and approx half of your average salary every year for the rest of your life. So for me, because I started late like you, and worked part-time while raising children, and want to retire before 67, mine will be more like a quarter average salary (but together with dhs pension and state pension we will do all right. If you have children, expect that it will significantly affect your family income. But you will get some help with childcare costs etc.

I think you are doing really well OP. Good to get into the habit of being careful with money early on.

To own a house at 25 is a huge achievement, so it's great that you've got that. DH and I had similar incomes a few years ago and we managed absolutely fine. We had to budget each month so we didn't overspend and it was difficult to save, but we were able to eat and pay our bills and it sounds like you're on the path to earn more.

You are doing well. I'd aim for 6 months living costs in an account (poss premium bonds...they're shit really but best of a bad bunch for savings you can access without risk) then as others said turn your attention to pensions as soon as you start work!

Sounds great to me! I’m 28 and also finishing uni, but don’t own a house yet- I don’t know many my age who do, let alone 25 year olds.

So often these things are relative - someone will tell you, you are doing really well, someone else will say not.

I think the best way for YOU to tell, not just now, but keeping tracking in the future, is to decide what you want to have achieved financially by retirement, and then work backwards from there to see if you are on track for it.

At it’s simplest, by retirement you would want:

• a paid for house, with all major renovations done and/or problems fixed
• a pension (or lump sum from which you can deduct a pension yourself) at an amount you can live at. Most people choose 1/2 or 3/4 of the final income, noting that they won’t have housing costs (see above) or commuting to work costs to pay
• an emergency fund/lump sum fund to pay for anything unexpected.

At 25, if you retire at 65, what do you have to do in the next 40 years to make sure you have achieved the above simple plan? Then, what do you need to do this particular year?

Start saving early, and often and the amounts can be low, due to compound interest.

I think you’re doing amazing. If you need car during the next two years sell your premium bonds, I wouldn’t finance one.

Once you equality, if you’re a HCP and working for the NHS your basic wage will likely be more than the 25k anyway with your shift allowances.

You are well on the way to a financially sound future.

Well done you 👏 x

*qualify not equality, bloody iPad.

You’re 25, own your own home, have savings in the bank, are studying for a career and clearly have a very sensible head on your shoulders, I think you should be very proud of yourself x

What immediately struck me from your post is that, regardless of the figures, you have carefully thought through and planned your finances (realistically) while taking your situation into account.

I think that’s a big chunk of the battle in financial security so just continuing with that stands you in good stead (obviously no-one knows what life will throw at us down the line, but you’d likely be better equipped to cope with it with your attitude than not!)

At 25, I was pretty feckless and it took me until my 30’s to understand this, so you’re doing well!

Good luck with the rest of your course

Thank you all so much! I can't tell you what a relief it is to hear this.

Also huge thank you for the solid advice. Yes I will be NHS so it's really good to understand the NHS pension scheme a bit more.

@Rugsofhonour me and my DP own it together, it's not shared ownership though if that's what you mean. I agree with you about the high risk investment thing, it doesn't really make sense does it!? I'll drop it down to low/medium risk.

About children slowing down career progess, I'm not actually sure! I don't think so. As i'd still be employed by the NHS during any mat leave I don't think it would affect incremental pay increases. I could be wrong though, I'll have to look into it.

Certainly dropping hours to PT would have an impact. Luckily we wouldn't need to pay for childcare, thank the lord! I know how expensive it is, especially for more than one child. I'm not really there yet though! I deliver babies, which turns out is the best contraception ever

Thanks again all!

@Tee20x

I'm almost 25 with a baby and no house so you're doing better than me!

Just keep adding as much as you can to your savings to be honest. And when you start working join a decent pension scheme. See people all the time saying to pay in while you're young.

No way! You're a mum and 100% doing better than me. It's hardest job in the world and you never get a day off!

Mat leave doesn't impact your pay progression in the NHS, as that would be discrimination.

You're doing great OP!

I think you are doing very well indeed for your age. Owning your own house at 25 is quite an accomplishment these days.