Late 20’s, what to do about possible recession?

Matto1

Hi all,

Apologies first of all if this is in the wrong thread.

Ive been trying to follow the impending recession and how best to prepare for it.

I’m currently in my late 20’s. Graduated with a business degree and I’m now working in a software company for the past 8 months.

I’ve roughly 30k savings. Engaged and due to get married next year (in Italy...not my choice haha) and my parents left me a site so I’m currently looking at applying for planning permission as rent is just too crazy (currrently paying 1400 a month for a one bedroom)

Right now I’m happy with my situation...I’m quite sensible with money without being tight or going without but from looking around and also what I’m reading it seems like the good times won’t last.

I’m trying to figure out where or how to best position myself. I completely understand certain things are unavoidable (losing my job etc) but what would be the do’s a donts? I’m half thinking of maybe going for a public sector job for security...even though I’m very happy in the job I’m in.

Is there anything that would be sensible to invest in? Would it be madness to apply for a mortgage with this impending recession?

I’ve tried researching this but to be honest it’s so complex...was following some of the related threads here and there seems to be a lot of informed, intelligent opinions.

What do people think?

Peregrinus

1. Don't borrow.

2. Make sure your 30k savings are in low risk investments, even if they are low-yield. Think bank deposits, not shares or property.

3. If you expect a recession, don't build on your site just yet. Building costs are likely to fall during a recession. (So will rents, in all likelihood.) Your income may also fall, or at least its growth prospects may be limited, and you may want to tailor your building ambitions to your reduced circumstances. Lot easier to do that when you know what your reduced circumstances are.

4. If you're happy in your job, shifting to another job is a big risk - as in, it may be financially prudent, but you risk job satisfaction, career progression, etc, etc. Is your Reason For Living in a public sector job? If at least one of you is, that should be enough to feed and clothe the two of you if the worst comes to the worst.

The J Stands for Jay

Just remember that the last recession was particularly bad; they're not all going to be like that. You need to live your life rather than worrying about the future.

That said, you should be prepared. You're not in your job long, and in previous recessions, IT expenditure was often seen as expendable with job losses happening there (I'm always amazed at the shortsightedness of this, IT is pretty important). You have your emergency fund in place, so you'll be ok.

The advice in the post above is decent, but don't worry so much.

Peregrinus

(Just to add, given your concerns about a possible recession, if anybody suggests to you that you should borrow to finance your wedding in Italy, or signficantly deplete your 30k savings to do so, cast them out of your life and never speak to them again.)

jbkenn

Matto1 wrote: »

I’ve roughly 30k savings. Engaged and due to get married next year (in Italy...not my choice haha) and my parents left me a site so I’m currently looking at applying for planning permission as rent is just too crazy (currrently paying 1400 a month for a one bedroom)

You have a site, invest in one of these, or similar,
https://www.loghouse.ie/product/budget-one-bed-b-log-cabin-6m-x-5-2m/
should be doable for approx €15,000, leaving you with €15k, saving your rent of €1400 per month, so your savings back to €30k in 12 months, to me, a no brainer
p.s. I have no connection with the linked company

Matto1

Peregrinus wrote: »

(Just to add, given your concerns about a possible recession, if anybody suggests to you that you should borrow to finance your wedding in Italy, or signficantly deplete your 30k savings to do so, cast them out of your life and never speak to them again.)

Some of my savings will probably be used for my wedding but I’m also setting aside €500-€1000 month currently to pay for it too so it shouldn’t impact my savings too much.

The wedding is pretty much an unavoidable expense.

Matto1

Peregrinus wrote: »

1. Don't borrow.

2. Make sure your 30k savings are in low risk investments, even if they are low-yield. Think bank deposits, not shares or property

The only problem is how to I build a house without borrowing?

My savings are currently in a regular savings account. I was thinking of investing in gold but I just don’t know enough about it not to get stung

Peregrinus

Matto1 wrote: »

Some of my savings will probably be used for my wedding but I’m also setting aside €500-€1000 month currently to pay for it too so it shouldn’t impact my savings too much.

The wedding is pretty much an unavoidable expense.

Oh, sure. I wasn't intending to have a go at you for being so extravagant as to get married.

It's just that weddings are one of the occasions in life that tend to involve a great deal of actually quite avoidable expense. If you're (a) anticipating a recession while (b) hoping to finance the construction of a house, it's a good idea to be pretty strict with yourselves - and even stricter with family members who may have views as to how your wedding should be celebrated - about which wedding expenses truly are unavoidable and which are not. You need a ceremony. You need a party involving food, drink and music. The rest is optional.

fits

The thing about building during a recession is that it is very risky as contractors and window companies can go out of business taking a good chunk of your money with them. Also if you are waiting, you are forking out 15k a year in rent and two years can go by quickly.

also you need planning permission and services for log houses - you may as well build a proper house. Interest rates are low too and you can fix the mortgage for 5 years if you want certainty about payments.

Matto1

Peregrinus wrote: »

Oh, sure. I wasn't intending to have a go at you for being so extravagant as to get married.

It's just that weddings are one of the occasions in life that tend to involve a great deal of actually quite avoidable expense. If you're (a) anticipating a recession while (b) hoping to finance the construction of a house, it's a good idea to be pretty strict with yourselves - and even stricter with family members who may have views as to how your wedding should be celebrated - about which wedding expenses truly are unavoidable and which are not. You need a ceremony. You need a party involving food, drink and music. The rest is optional.

Oh no I didn’t take it as you having a go at all...sorry if it came across that way.

We’re getting married abroad as we both wanted a small wedding. And although it’s costing more than a small wedding would here, we felt it was the only way to have that small wedding without insulting people we know.

roots2branches

I've been to plenty of weddings that cost a fortune. The best one I went to was some musician friends who got a lend of a farmers field. They paid for a stage and PA and being musicians they asked all their musician friends to come and play and for everone else to bring food. They spent no more than a few grand and it was brilliant, like a mini festival. The 30k weddings were crap, predictable, boring and cheesy incomparrision.

It's one day, you do not need to spend a furtune and as a young couple renting you have far bigger priorties than offending people you know by not spending a futune. Bollox to them I say.

I'd focus on building your home but again, keep it modest. I recently renovated a cottage, I picked up a 2nd hand kitchen, it's great, solid oak, all for well under a grand. Modesty is king. Good luck.

Matto1

roots2branches wrote: »

I've been to plenty of weddings that cost a fortune. The best one I went to was some musician friends who got a lend of a farmers field. They paid for a stage and PA and being musicians they asked all their musician friends to come and play and for everone else to bring food. They spent no more than a few grand and it was brilliant, like a mini festival. The 30k weddings were crap, predictable, boring and cheesy incomparrision.

It's one day, you do not need to spend a furtune and as a young couple renting you have far bigger priorties than offending people you know by not spending a futune. Bollox to them I say.

I'd focus on building your home but again, keep it modest. I recently renovated a cottage, I picked up a 2nd hand kitchen, it's great, solid oak, all for well under a grand. Modesty is king. Good luck.

Sorry I should have been more specific. It’s not that we feel we need to go all out. It’s purely that numbers are too big if we stay in ireland.

Going abroad means we can keep it small and simple without insulting anyone that feels they should have been invited to a wedding that was on in Ireland

boege

Key is to avoid losing your job - after that everything else is a relatively minor matter. So look to see where a recession will come from and how your job will be affected.

Ireland is exposed to the US economy as FDI invest here tends to reduce jobs here when the US is in recession. We have few non-Irish EU employers here so any recession exposure is on EU trade.

Also consider if your employers products/services will be wiped out by new technology. The financial services, banking and insurance sectors are currently automating a lot of low end paper processing roles.

Brexit is a mess and completely unpredictable. Maybe wait out Brexit before starting the house/wedding. Once/if Brexit is sorted then crack on.

On other exposure is interest rates. I have never seen a period where interest rates were so low for so long - its very strange and one wonders what happens if it ends. To me this is the potential elephant in the room.

Nika Bolokov

I don't think you can wait out Brexit. If it's no deal then the affects will be felt for over ten years.

Don't take on debt and save as much as you can.

Matto1

Nika Bolokov wrote: »

I don't think you can wait out Brexit. If it's no deal then the affects will be felt for over ten years.

Don't take on debt and save as much as you can.

Ideally I don't want to take on a debt but how can you build a house otherwise?

Peregrinus

Well, you could consider not building a house. Rents will tend to fall during a recession, plus if (God forbid) you do lose your job, renting gives you a lot more flexibility to scale down your living expenses by moving to a cheaper gaff.

Or, less radically, you could build a much smaller, lower-specced house than you were thinking of, thereby taking on less debt. You have the option to build or or upgrade when you feel more confident and more flush with cash.

Matto1

Matto1 wrote: »

The only problem is how to I build a house without borrowing?

My savings are currently in a regular savings account. I was thinking of investing in gold but I just don’t know enough about it not to get stung

Your 'safest' bet with gold is to probably try invest in a gold mining company. Either way, gold can be volitile and not the safety net/old reliable that it once was. I'm sure you'll find a thread on here with knowledgeable people on trading, investing and all that other lark. Certainly don't be hasty, do your due diligence. All the best and congratulations on your upcoming wedding

Atlas_IRL

Have you thought of going with a pre fab/flat pack home. If i had a site i'd go down that road over going with a builder. Self builds are always over delayed and go over price.

This thread really has nothing to do with E&BM. OP life is full of curve balls. How you deal with them is up to you.

The Gloomster!