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



## Noor77 (18 Apr 2007)

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


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## ClubMan (18 Apr 2007)

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.


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## jrewing (18 Apr 2007)

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....


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## Noor77 (18 Apr 2007)

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.


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## ClubMan (18 Apr 2007)

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.


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.


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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## Noor77 (18 Apr 2007)

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?


 

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


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## ClubMan (18 Apr 2007)

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?


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## jrewing (18 Apr 2007)

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.


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## Noor77 (18 Apr 2007)

ClubMan said:


> Or why not just save sporadic amounts in a _Rabo _5% account?


 
Can I do that? Can I lodge the €4k and then put another amounts in when I have the funds???


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## jrewing (18 Apr 2007)

Noor77 said:


> Can I do that? Can I lodge the €4k and then put another amounts in when I have the funds???


 
Yes


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## nelly (18 Apr 2007)

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.


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## Noor77 (18 Apr 2007)

jrewing said:


> Yes


 

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?


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## jrewing (18 Apr 2007)

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?


 
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.


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## ClubMan (18 Apr 2007)

Noor77 said:


> Can I do that?


Yes - from [broken link removed]:


> No restriction on withdrawals or deposits





> Can I lodge the €4k and then put another amounts in when I have the funds???


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.


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## Noor77 (18 Apr 2007)

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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## ClubMan (18 Apr 2007)

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


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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## Noor77 (18 Apr 2007)

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.


 
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 ;-)


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## Murt10 (18 Apr 2007)

Take in a few foreign lodgers.   That should sort you out. I presume you have broadband at this stage.

ROFL.


Murt


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## ClubMan (19 Apr 2007)

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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## Noor77 (19 Apr 2007)

ClubMan said:


> or am I raking over old ground here...?


 
Yes, been there, done that and got very burnt by the experience!

Although I know it would be a great way to help me get to the €12k faster


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## ClubMan (19 Apr 2007)

Noor77 said:


> Yes, been there, done that and got very burnt by the experience!


OK - I wasn't sure. You were renting to a friend who got tardy with the rent or something if I recall correctly?


> Although I know it would be a great way to help me get to the €12k faster


Could you take another part time job to earn more cash?


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## Noor77 (19 Apr 2007)

ClubMan said:


> OK - I wasn't sure. You were renting to a friend who got tardy with the rent or something if I recall correctly?


Yes, that's right Clubman. I think my landlady days are over ) I find paying the mortgage myself a bit of a struggle. Although by recent standards it's probably not too bad at €1,100 a month.


> Could you take another part time job to earn more cash?


I was thinking about this - but as a civil servant I'm not too sure that I am allowed


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## gar123 (19 Apr 2007)

Could you take another part time job to earn more cash? I was thinking about this - but as a civil servant I'm not too sure that I am allowed 

yes you are right, as a civil servant it's hard enough to fill a day out doing very little 
imagine the strain if you took on a real job too

hehe only joking............


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## Noor77 (19 Apr 2007)

gar123 said:


> yes you are right, as a civil servant it's hard enough to fill a day out doing very little
> imagine the strain if you took on a real job too


 
Hope you are joking. I work from 9am to 6pm five days a week and take 40 minutes for my lunch and no tea breaks because I work in a hectic, hectic, hectic office. Sorry to debunk your civil service myth


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## Noor77 (3 Aug 2007)

Just to give you an update. I have managed to stash away €6100 so far. Not great but it's a start. €1200 is in the AIB Regular Saver account and the rest is with Rabo.  Clubman will be delighted to know that I have nipped the post office habit in the bud ;-)


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## Sn@kebite (3 Aug 2007)

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

Would walking into a pawn shop and picking up a gold ring or whatever help?
I'm sure you'd make some money by holding on to it for a year or so and re-selling it?


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## ClubMan (3 Aug 2007)

Noor77 said:


> Just to give you an update. I have managed to stash away €6100 so far. Not great but it's a start. €1200 is in the AIB Regular Saver account and the rest is with Rabo.  Clubman will be delighted to know that I have nipped the post office habit in the bud ;-)


Well done. _EBS _might be a good bet for their regular saver as they seem to have as good a rate as others (7%) and not so many restrictions. Can you (if you want!) post an update on where you stand generally as I can't figure it all out from this and other threads?


Sn@kebite said:


> Would walking into a pawn shop and picking up a gold ring or whatever help?
> I'm sure you'd make some money by holding on to it for a year or so and re-selling it?


Huh!?


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## Sn@kebite (3 Aug 2007)

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



ClubMan said:


> Huh!?


If I bought a piece of jewelery for say, 600€ and i brought it back to the pawn shop or another a year later, would i not get more than 600€??


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## ClubMan (3 Aug 2007)

What the hell has that got to do with anything in this thread?


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## Sn@kebite (3 Aug 2007)

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



ClubMan said:


> What the hell has that got to do with anything in this thread?


ClubMan - the OP is trying to save 12k, Isn't (s)he?  What i'm saying is:
(i) Buy Gold and hold it until Sep 2008
(ii) When Sep 2008 arrives resell it for a higher price, (because i thought gold would go up in price/value in one year). This would yield some quick cash, instead of saving up all the money.
Do you know what i mean? (Is was just a suggestion )


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## ClubMan (3 Aug 2007)

Sounds risky to me - gold prices could fall and the retail market for gold for a small investor is most likely inefficient which means that there is a significant risk of losing money due to trading costs or not paying/getting a fair price (especially in pawn shops). I don't think that your suggestion is very prudent or suitable to be honest.


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## Sn@kebite (3 Aug 2007)

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



ClubMan said:


> Sounds risky to me - gold prices could fall and the retail market for gold for a small investor is most likely inefficient which means that there is a significant risk of losing money due to trading costs or not paying/getting a fair price (especially in pawn shops). I don't think that your suggestion is very prudent or suitable to be honest.


Fair enough - Could it be better to buy from a pawn shop, wait a while, and then auction it on ebay/amazon? At least that way you're under no pressure to sell quickly, As i hear pawn brokers a excellent at talking you into selling your stuff to them. (not sure there's truth to it though)


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## ClubMan (3 Aug 2007)

I suspect that the original poster would be better off with much more prudent savings strategies such as high rate lump sum and/or regular saver deposit accounts to be honest.


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## Sn@kebite (3 Aug 2007)

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



ClubMan said:


> I suspect that the original poster would be better off with much more prudent savings strategies such as high rate lump sum and/or regular saver deposit accounts to be honest.


I agree! - Now that i see (s)he seems to be doing quite well.


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## Noor77 (3 Aug 2007)

ClubMan said:


> Can you (if you want!) post an update on where you stand generally as I can't figure it all out from this and other threads?



  Do you mean where I stand generally re: finances?    Salary: €50k gross per annum  Mortgage: €900 a month  ESB &; Gas: average €120 a month  Savings: €300 per month to regular saver plus whatever else I can spare bunged in to Rabo  Doctors / prescriptions: €100 average per month  Standing Order to charity: €50 a month  Visa: I usually spend €400 to €500 a month but generally clear it off every month  Mobile: About €40 a month  Property Maintenance Fee: €2000 per annum  Tv Licence: €158 per annum    The rest all goes on food, socialising, travel etc.....  I don't have cable tv or a landline so no bills there


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## fjgh15 (4 Aug 2007)

If you really want to do this in the timeframe you need to, you might want to get a bit ruthless with yourself. I suggest that you keep an exact record of your spending for a month at least, exactly, down to the cent, what you spend, what you spend it on and when you spent it. Categorise it, food, travel, Phone, whatever, and at the end of the month, take a good, long look at it and some of it might surprise you. I don't mean any estimates, I mean an account exact to the cent and date. Figure out what you needed and what you didn't need. (€120 a month for ESB and Gas seems high)
The best way of saving is to not spend what you have. Any interest (though welcome) in this particular case won't be huge, so I'd suggest you concentrate on spending less, rather than earning more from interest.
Good luck with it.


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