Hi Money Minder,
Yo, I’m a 23-year-old looking to study my master’s in the UK. I need some help hitting my financial goal of 100k in 1.5 to 2 years max.
Here’s the deal:
I’ve paid off my student loan and have 20k in savings (including emergency funds). I bring in 4.2k a month, with 3.3k as disposable income. The leftover 900 goes towards savings for a future house, healthcare, and retirement. I don’t plan on investing or touching that yet. I also get an average bonus of 3k per year.
After spending around 1.1k a month, I’m left with 2.2k in savings. If I park this money in a savings account, I’ll have 64k after 1.5 years (including the current 20k). I’m trying to cut costs, but most of my expenses are necessities like bills, groceries, and insurance. Luckily, I’m not paying rent since I’m crashing with my folks.
How can I reach my 100k goal without risking too much of my capital, knowing I’ll need the cash soon? I’m open to taking a loan later to cover it, but I want to limit any student debt.
Any advice, Money Minder?
Cheers,
Financially Focused
Response from THE MONEY MINDER:
Hello There,
Congratulations on being debt-free and having a solid savings plan in place! It’s great that you have a clear financial goal of saving 100k within 1.5 to 2 years to fund your master’s degree in the UK. Given your current situation, it seems like you are on the right track with your savings and disposable income.
To achieve your goal, here are a few realistic and practical steps you can consider:
1. Increase your savings rate: Since you are able to save 2.2k per month, see if there are ways to further reduce your expenses to increase your monthly savings. Look for areas where you can cut back without sacrificing necessities.
2. Explore higher-yield savings options: Consider moving some of your savings into a high-interest savings account or other investment vehicles that offer better returns than a traditional savings account. This can help your savings grow faster.
3. Maximize your bonus: If you are getting a 3k bonus per year, consider putting a portion of it towards your savings goal rather than using it for other expenses.
4. Look into part-time remote work: Since your current contract does not allow for side jobs, explore remote work opportunities that can be done outside of your working hours. This can help boost your income without conflicting with your main job.
5. Consider short-term investments: While you mentioned being risk-averse, you can explore low-risk investment options such as certificates of deposit (CDs) or short-term bonds that have a relatively stable return and can help your money grow over a short period.
6. Stay focused and disciplined: Keeping track of your expenses, sticking to your budget, and regularly reviewing your financial goals can help you stay on course towards reaching your target.
Remember, every little bit of saving adds up, and with dedication and careful planning, you can definitely achieve your financial goal. All the best from THE MONEY MINDER!
