Giving up smoking last month will save Mandie Martin as much as £3,500 a year, but the 25-year-old radio worker is still struggling to build a savings cushion and get on to the property ladder.

She says: “I used to withdraw £10 from the cash machine every morning to buy cigarettes on the way to work — and I’d spend the change on coffee and a banana. I’ve stopped that now, so I should be able to start saving for once. Now seems an obvious time to review my finances.

“I started smoking when I was 15 and decided to stop for an equal split of health and financial reasons. It was difficult, but I got lots of help from the charity Quit [0800 002200], which offers free telephone counselling and sends me daily e-mails explaining what I’ve achieved so far. The e-mails really help to keep me motivated.”

Mandie lives with her parents in Manchester, paying £200 a month in rent, including bills. She says that this is good value, but she would like to move out and buy a place with her boyfriend, Douglas, who owns a security business, while local property prices remain affordable.

She says: “Small terraced properties in the areas we’ve looked at go for about £120,000 to £130,000, which looks like great value. We think that now would be a good time to buy and would like to do so by the end of the year. But it would be reassuring to get some expert opinions on where the market is going.

“We are interested in the Government’s HomeBuy scheme, which is supposed to help first-time buyers. Our combined income is below the £60,000 threshold, but I’m not sure whether the scheme would be right for us. If not, what are our chances of getting a mortgage and what sort of deal would be best?”

After her rent and monthly car costs of about £340 (including repayments on a car loan), a gym membership of £35 and mobile phone tariff of £31, Mandie’s job as an administrator and planner for Global Radio brings in about £774 a month — though this fluctuates with performance-based commission.

She says that she is very happy in her job and has no plans to move. However, she and her colleagues have had to accept a one-year pay freeze as a consequence of the credit crunch. She says that she works hard and does not have time to boost her income with a second job.

Much of Mandie’s pay goes on impulse purchases of food. She says: “I often spend £10 or more on groceries on my way home from work, especially when I stay at Douglas’s — I know there won’t be much in the fridge there. Spending on food is definitely something I could reduce.”

She also spends heavily on presents for birthdays and Christmas, and on socialising with friends, often eating out. She has no savings, investments or pension provision and says: “I tend to spend as I earn, but I would like to get into the savings habit. I don’t really know where to start, though. It would be good to have some advice on how to budget better and the kind of savings products I should look at.”

On the plus side, Mandie has no debts, apart from her car loan and £1,000 left to pay on a £1,700-a-head two-week break in December. “I’m going to the Maldives with Douglas and am paying in monthly instalments,” she says. “I have already missed one payment because I was disorganised, which meant having to pay extra the following month.

“It will be a dream holiday, but I guess I need to pay it off before we can think about putting a deposit on a property. The last payment is in December, but any advice on clearing it sooner would be very welcome.”

She sums up: “The priorities are to buy a house with Douglas as soon as possible and to start putting money aside for the future. I want to know how I can best achieve this — and whether there’s anything else I ought to be doing at this stage.”

Financial CV

Income £774 a month, after rent, phone and gym bills.

Rent £200 a month.

Objectives To get into better financial habits and start saving. Also wants to get on the property ladder with her boyfriend, possibly using the Government’s HomeBuy scheme, provided that the timing is right.

‘Without a standing order I know I’d spend it’

The first thing I will do is draw up a detailed budget, as Sue Faiers suggests. I agree that it’s important not to overstretch ourselves. I’m also going to set up a standing order to put the money I’m saving on cigarettes into a savings account. Otherwise I know I’ll spend it. I’ll put it into a best-buy regular saver for now, then move some into an Isa next year.

Dennis Hall’s advice on waiting a bit for property prices to fall further makes sense. Anyway, the earliest we could hope to buy would be the new year.

Richard Stone’s comments on the HomeBuy scheme were also helpful. I have made an appointment to see our local agent, but that won’t be for a while as there is a waiting list.

Ms Faiers mentioned looking at pension provision and income protection assurance. I’m going to speak to my employer about joining the company pension scheme. I would not consider assurance at the moment, though, because I’m confident I could temp or find bar work if I needed to.