A FIRST-time buyer from London boosted his savings by up to £850 a month by giving up nights out and splitting his cash across four bank accounts.
Joseph Torgbor, 29, bought his two-bed terraced house in Hertfordshire for £312,000 with his partner in February this year.
Stephen Chung Joseph decided to see a financial adviser after deciding he wanted to save more
Joseph was one of the 50 per cent of young adults aged between 18 and 34 living with parents while they saved to buy a house, according to new figures from online mortgage broker Trussle.
He paid his parents £200 a month but over eight years, he only managed to save £2,000 at a rate of £150 a month – blowing the rest of his cash on nights out and expensive holidays.
A “yes” man, Joseph often ended up spending between £200 to £300 a week on socialising and eating out, accepting invites to drinks after work up to three times a week on top of weekend socials.
At 26, he turned to the help of a financial adviser who taught him how to budget and maximise interest rates by splitting his cash across four accounts – current, savings, regular saver and a Help to Buy Isa.
Stephen Chung He bought the house with his partner in February this year
He paid £50 a month to keep her on a retainer but after eight months, Joseph was confident he could go it alone.
He budgeted £400 to live off and cut back on nights out, downsized his holidays and never went out on the weekend after payday, which was when he usually spent the most cash.
Before long, Joseph had boosted his savings to between £800 and £1,000 a month.
We sat down with Joseph to get the lowdown on what it takes to become a homeowner for our My First Home series.
Tell us, where do you live and what’s it like?
I live in Hertfordshire with my partner. We live in a two-bed terrace house which we bought in February this year.
We’ve only just moved in so we’re still settling in but we love it and it feels great to finally have our own place.
Stephen Chung The couple bought a two-bed terraced house in Hertfordshire
Downstairs it’s quite open-plan with an joint living and dining room, and then a separate kitchen and utility room.
Upstairs we’ve got two decent size double bedrooms too, with a garden round the back.When did you buy it and how much did you pay?
We bought the house for £312,000 in February this year – although we made the offer on it in November.
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There was a long chain but we still only had to wait three months before we could officially move in.
We put down £31,500 for the deposit which worked out at just over 10 per cent.
We split the moving costs 50/50 so we each saved around £16,000 for our half of the deposit and our mortgage is for £280,500 over 25 years.
It was on the market for £320,000 but we offered £305,000 to save some money. It was rejected but we all finally agreed on £312,000.
We did have Help to Buy Isa which we maximised but the house we wanted was over the £300,000 limit so we didn’t get the Government bonus in the end.
Stephen Chung Joseph bought most of the furniture in Black Friday and January sales
That’s a lot of money to save. How did you do it?
For me, I had to sit down and go through my finances and take a hard look at where all of my cash was going. I had to be honest with myself and it was brutal.
I realised I was telling myself that I was only going out a few times a week when really it would more like four – by the end of the week I could’ve spent between £200 and £300 on going out and socialising.
I’d never moved out of my parents house and paid £200 towards the bills and at the end of the month I’d put whatever was left in my account into my savings – but that was usually around only £150 a month.
Is paying for a financial adviser worth it?A FINANCIAL adviser will help you decided what to do with your money, such as where to invest, plan for retirement or how to save.
Most financial advisers charge of a fee of anything between £50 to £250 an hour, or they’ll take a percentage of the amount of cash you want advice on which can be up to five per cent.
While their advice might save you cash in the long-run, it will also eat into any savings you make so you should only seek their advice if you know that you can afford to.
There are two types of advisers, the independent financial advisors (IFA) that can sell you products from any provider across the market. An IFA should give you the best advice tailored for you.
Restricted advisers aren’t independent either and make money from companies for recommending their products so you might end up paying for a service that isn’t the best for you.
Make sure they’re registers by the FCA here. This will give you greater protection if you’re not happy with the service.
You can get free advice on your finances from the Money Advice Service who are independent. It’s worth checking out their website first before seeking paid-for help.
If you’re seeking help with getting a mortgage, boosting your credit score or the best savings account for you then you should check out our free guides too.
I had around £2,000 saved when I seriously decided to sort out my finances because I knew I could do more.
About three years ago, when I was 26, I went to see a financial adviser who told me how to budget.
She said I needed to put away my savings away straightaway, rather than save whatever I had left over at the end of the month.
She also told me how to maximise my savings with a current account rather than relying on poor rates offered on savings accounts.
My savings account offered one per cent interest and others weren’t much better but she told me to open a TSB current account instead.
That’s because when you have a current account you can open a regular saver that paid five per cent interest.
You’re limited to how much you can put in every month and it can only stay open for a year so you’ll need to move the cash into a savings account when you close it.
But you can just open another one and keep saving and keep maximising the rates.
Stephen Chung Joseph had been living at home in his parents until he bought his own place
Stephen Chung The couple are excited to finally have their own home
Both me and my girlfriend opened Help to Buy Isas with £1,200 and then put in £200 each.
The adviser cost me £50 a month to keep on retainer but then after eight months I thought, I’ve got this sussed and so didn’t need her any more.
I had it in my mind that I’d save between £800 and £1,000 every month. I didn’t have to give up too much but I did downsize on big holidays with the lads and so we went somewhere cheaper in Europe instead.
I budgeted myself between £400 and £500 to live off every month. I stopped going to every drinks social after work and learned to say no to every night out which saved me around £150 a week.
Stephen Chung He boosted his savings after paying to see a financial adviser
Stephen Chung They put down £31,500 for a deposit which worked out at about 10 per cent
I was lucky that I could live with my parents – I would have struggled to save so much if I was renting.
We also saved money on a mortgage adviser by using Trussle which is online and free.
How did you decided on location?
I grew up with my family in Tooting in London and my partner lived with her parents in Hertfordshire.
We briefly looked at properties in London but one look at the house prices and we knew it was a ridiculous idea for us to even take it seriously.
That’s why we looked in Hertfordshire and I knew that I could commute to London to my job as a compliance officer at a law firm.
What help is out there for first-time buyers?GETTING on the property ladder can feel like a daunting task but there are schemes out there to help first-time buyers have their own home.Help to Buy Isa – It’s a tax-free savings account where for every £200 you save, the Government will add an extra £50. But there’s a maximum limit of £3,000 which is paid to your solicitor when you move.
Help to Buy equity loan – The Government will lend you up to 20 per cent of the home’s value – or 40 per cent in London – after you’ve put down a five per cent deposit. The loan is on top of a normal mortgage but it can only be used to buy a new build property.
Lifetime Isa – This is another Government scheme that gives anyone aged 18 to 39 the chance to save tax-free and get a bonus of up to £32,000 towards their first home. You can save up to £4,000 a year and the Government will add 25 per cent on top.
Shared ownership – Co-owning with a housing association means you can buy a part of the property and pay rent on the remaining amount. You can buy anything from 25 to 75 per cent of the property but you’re restricted to specific ones.
“First dibs” in London – London Mayor Sadiq Khan is working on a scheme that will restrict sales of all new-build homes in the capital up to £350,000 to UK buyers for three months before any overseas marketing can take place.
Starter Home Initiative – A Government scheme that will see 200,000 new-build homes in England sold to first-time buyers with a 20 per cent discount by 2020. To receive updates on the progress of these homes you can register your interest on the Starter Homes website.
Where in London, our house would have set us back around £588,000 (according to Zoopla), whereas we knew we could get a home for £200,000 less by looking outside the M25.
It took us around eight or nine months to find the the right house. We started off looking at properties that really varied in price because we didn’t really know what we could afford.
We decided to get a mortgage in principal in the October so that we could start looking at house that we could actually afford. That narrowed things down a bit for us.
What was the worst bit about the house-buying process?
I found the sheer amount of paperwork overwhelming at some points and it felt like it took forever.
Stephen Chung He managed to save cash by cutting down on nights out
Stephen Chung The house is in a good spec and doesn’t need much work doing to it
You need a lot of proof of income before you’re offered a mortgage and then of course there’s all of the legal stuff once you’re offer has been accepted.
It was also tricky trying to view houses and balancing it around work too. I’d also say make a list of all the things you want in a house and work through them when you view it.
The whole process felt like it took forever as well. I’d say, if you can, keep on top of it all from the beginning.
If I have any advice though, it’s sort your finances out sooner rather than later, even if you’re not thinking about buying a house.
That way, you’ll have your money in order when you decide that you’re ready instead of having to wait a few more years before you can buy somewhere.
How did you afford to furnish your house?
We had planned to use the money we would have saved from our Help To Buy Isa bonus to buy furniture but in the end we didn’t need to.
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We took advantage of Black Friday and January sales and stored it all at our parents’ homes so that we had most of it when we moved in.
The rest we’re just planning to buy when we can.What was it like when you finally moved in?
We were very proud when we picked up the keys. Because the whole process could fall through at any point when you’re buying a house it was such as relief to complete.
It felt like we’d finally got over the final hurdle. It doesn’t need much work doing to it either which is a real bonus so we can just concentrate on making it our home.
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