Saving for a Study Year - How long should it take to save €12,000

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Noor77

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Hi

Sorry for the long winded title. Basically, I want to take a year off work to do another Masters and will probably take a loan out to cover some of the amount but I hope to save approximately €12k myself.

I am hoping to save the €12k by the middle of September 2008.

From May this year I will saving the maximum contribution of €300 per month to the AIB regular saver account. In the middle of May I will be depositing €4,000k to a Rabodirect Savings account.

How much additional money a month would I need to save to reach the 12k by September of next year? And could anyone recommend a product.

Thanks

Noor
 
Well if you forget about interest since it will be marginal to the big picture you will save a lump sum of €4K and then €300 for 16 (?) months (€4,800) so you will have €8,800 plus interest so will be about €3,200 short.
 
For at short timeframe like that, your safest bet would be to use a high interest regular savings a/c and place any surplus in high interest lump sum a/c, as opposed to equities.

You have selected the current best deals, so I suggest you stick to the plan as you have outlined above.

As for the "how much additional will I need to save?" - make a simple spreadsheet and crunch the numbers..... a quick calc, not including interest (which won't be huge anyway) would be between 200 and 250 per month extra....
 
Thanks for the replies.

I don't know if I could manage another €250 a month because of mortgage and bills etc...

I've opened an "old fashioned" post office account and any time I can I stick a few euro in it. I know there is negligible interest but it is at least putting the money out of temptations way and I'm not tied to a specific amount every month. So far I have saved 280 in the last 5 weeks .... but that's only because I am being especially budget-minded recently. I don't think I could count on it to make the 12k shortfall though.
 
Noor77 said:
I've opened an "old fashioned" post office account and any time I can I stick a few euro in it. I know there is negligible interest but it is at least putting the money out of temptations way and I'm not tied to a specific amount every month.
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Why not stick it in another account that offers better interest and is also putting money out of the way of temptation. An Post savings accounts are the pits and really only for people who don't have or can't get a proper account elsewhere in my opinion. Even your local CU would probably be better than the PO.
So far I have saved 280 in the last 5 weeks .... but that's only because I am being especially budget-minded recently. I don't think I could count on it to make the 12k shortfall though.
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So you'll presumably have to alter your plans? How did you arrive at the €12K figure and what is it for?
 
ClubMan said:
Why not stick it in another account that offers better interest and is also putting money out of the way of temptation.


So you'll presumably have to alter your plans? How did you arrive at the €12K figure and what is it for?
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I chose An Post because I live beside one and I can run in on Saturday mornings and empty my wallet! Yes, it's not good in terms of interest but for convenience it is. Also, with most savings accounts it appears that you have to save a fixed amount regularly (as I will do with AIB) but I can't commit to another fixed monthly amount.

I arrived at the 12k because I calculated that I would need about 24k for my year out and I would like to save half and get a loan for half
 
Is there no CU close by? Chances are even the CU will give better returns than the PO for sporadic lodgements. Or why not just save sporadic amounts in a Rabo 5% account?
 
Why don't you stick the excess into the Rabo account ? It's paying 5% interest up to Eur 10k, and the money is accessible if you need it.
 
instead of post office, i would have a CU account for this money - same low interest rate but if you were ever in need of a "tide me over loan" you could get it there painlessly (if you have evidence of a savings record there).
Otherwise all i advise is to use the calculators on the rabo website.
Good luck with the plans.
 
jrewing said:
Yes
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Great. Thanks for that.

I was thinking (if I could squeeze) an extra €100 a month that I might try and do the Rabodirect "managed funds" product.

Would it be worth my while with such a small amount?
 
Noor77 said:
I was thinking (if I could squeeze) an extra €100 a month that I might try and do the Rabodirect "managed funds" product.

Would it be worth my while with such a small amount?
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Not for that length of time (16 months) - funds are good long-term investments, but short-term volatility means that they could be down by 20% (for example) over this time-frame.
 
Noor77 said:
Can I do that?
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Yes - from [broken link removed]:
No restriction on withdrawals or deposits
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Can I lodge the €4k and then put another amounts in when I have the funds???
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As above - you should probably not start investing in their funds and should stick to their 5% savings account for the term that you are talking about. Anything else would be too risky since you need the money for a specific purpose in about 16 months.
 
No, you are right about the funds.

I will go with my plan and then try and lodge as much as I can into the Rabodirect Account to top up the €4K.

It's a pity the AIB Regular Saver does not allow monthly deposits over 300
 
Noor77 said:
No, you are right about the funds.

I will go with my plan and then try and lodge as much as I can into the Rabodirect Account to top up the €4K.

It's a pity the AIB Regular Saver does not allow monthly deposits over 300
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There are other regular saver accounts that don't have such a limit but you need to check the terms & conditions carefully to see if they meet your c. 16 months savings timeframe and offer you the required flexibility. See the Financial Best Buys forum.
 
ClubMan said:
There are other regular saver accounts that don't have such a limit but you need to check the terms & conditions carefully to see if they meet your c. 16 months savings timeframe and offer you the required flexibility. See the Financial Best Buys forum.
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Thanks Clubman. I have already set up the savings plan with AIB to start on May 1st. I just wonder why they have the limit.... I suppose it's to minimise the value we can get out of it!

I will be very happy if I reach the €12k. I'm sure it must be feasible enough. And I'm always keeping an eye out for any new products - I go straight to the last page of the Sunday Time Business Section every Sunday to check the latest comparisons bewteen the big banks :))

I have also swiched my regular current account to the High Interest Version ...so I might make a few euro on that ;-)
 
Take in a few foreign lodgers. :eek: That should sort you out. I presume you have broadband at this stage.

ROFL.


Murt
 
Yeah - rent a room for up to €7,620 p.a. tax free - or am I raking over old ground here...?
 
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