WealthCheck: 'I want to save and get on the property ladder'

Kofi Kramo, 28, works as a mental health researcher for the NHS. His main objective is to start saving more to get a foot on the property ladder. "I hope to own a London home by my mid-thirties," Kofi says. "But I'm a bit frivolous so I'd like to know how to use my money in a more balanced way."

Case notes: Kofi Kramo
Salary: Kofi earns 32,000 a year as an NHS mental health researcher.
Monthly outgoings: 1,000 on rent, bills, food and essentials, 200 on holidays, 800 socialising.
Debt: Kofi owes 600 on a student bank account.
Savings & investments: Kofi saves 100 a month. He has 800 in an ISA and 3,000 in a unit trust.

Advice this week is given by financial advisors Danny Cox of Hargreaves Lansdown, Martin Bamford of Informed Choice and Mel Kenny of Radcliffe & Newlands.

Property

To achieve his home-owning dream, Kofi needs to pay off debts and control his spending. Danny Cox says cutting out day-to-day luxuries will significantly speed up the process. "Dropping a gym membership or avoiding shop-bought lattes could help bring owning a property forward months or even years," says Cox.

Mel Kenny adds: "If Kofi is not strict with himself, he will find that his money is continually gobbled up though socialising and his goals will remain a dream."

He says that Kofi's current renting situation is "economically sound" and that his goal of becoming a homeowner by his mid-thirties may turn out to be good timing. "The levels of deposit required at the moment are prohibitive," says Kenny. "But this should improve considerably over the years."

Pension

If Kofi remains with the NHS to age 65, his pension should be almost half of his salary, plus he will have a lump sum as well. Cox says: "This final salary scheme is among the best available in the UK today. On top of this will be a state pension, so his retirement situation looks to be on track while he remains with the NHS."

Investments

Martin Bamford says that Kofi should concentrate on repaying any debts before he looks to invest. "Investing small amounts when you have debt rarely makes sense," says Bamford. "A better approach is usually to repay debt first, build cash savings and only after that, start investing for longer-term objectives."

Kenny says that Kofi must identify his tolerance for risk. "This will make things clearer as to how much he needs to cut back on his current expenditure, how much he needs to increase his earnings, or how much he needs to lower his goals," says Kenny.

Kofi already has some some money in an ISA and a unit trust. "I would recommend that Kofi adds the unit trust to his ISA holdings so that he won't have to worry about additional tax on the profits or income," says Cox. "It is easy to do and will be treated as part of Kofi's annual ISA allowance."

For a free financial check-up, write to Wealth Check, The Independent, 191 Marsh Wall, London E14 9RS; or email wealthcheck@independent.co.uk.