£32,000 salary - How can I save?

Level103

Hi guys,

I'm currently living at home in London, 22, paying only £300 rent, and spending about £700 on everything else (phone bills, going out, food and travel to work).

I take home £32,000 - which means £2,000 take home.

I can save probably around £1,000 a month, but I want to buy a car which will set me back with finance £400 a month (with insurance).

So that is taken down to £600 a month.

Any tips on saving for a deposit for a home?

I need to stay in Greater London, and probably looking at £175-£200,000 for a one bedroom flat.

Anyone been in my situation before?

This would basically mean no holidays for the whole saving duration also and not taking into account christmas etc.

Any tips?

shirlgirl2004

First of all you need to pay off your debts. Will you even get a loan for the car with your credit history?

As you're living in London you probably don't really need a car so save the money for a home instead. £32k isn't the biggest salary to try and buy a place especially in London but if you cut out spending on things you can't afford (like the car) you should manage to save a reasonable amount.

If you're still worried about spending on entertainment etc then maybe you aren't ready for home ownership yet.

Geenie

If you want to save you can do it on that sort of money. My only holiday for about 10 years was a soggy tent in Cornwall for a week. Not great at the time, but the longer goal was always in mind. Now I am smiling. What sort of car are you buying, as you can chuck money at something that will be worth nothing in a few years?! Don't get caught up in bling......it brings no long term happiness.

KiKi

Hi there

If I can be brutally honest for one moment, £700 on going out, phone, travel etc can easily be gotten down. You could make some savings there immediately. I don't live frugally at all, but after my mortgage, I spend (inc water, gas, elec, council tax, gym, mobile, landline, internet, food and charity donations) less than £370 a month. Sure, there are other expenses like clothes etc, but that's not another £330 on top!

If you don't pay any utilities after rent, then £700 sounds extravagant - which is fine if you want to spend it. But if you really want to save, then you need to think about what you're spending that money on. If you wanted to post what you spend that £700 on a month, people on the Debt-Free Wannabe board (or here) would happily give you some honest feedback and tips on how to get that down.

Also, if you are living in Greater London and spending on travel already, do you really need a car? I'd argue that you either have a car AND use it for work (thereby getting your travel costs in that £700 down) or that you don't need a car at all. I lived in Greater London for years, and never needed one, the transport links are so good, and I got lifts off of friends if required. Or walked. Don't forget that with the car it's also the MOT, the petrol, the things that need fixing, not just finance and insurance.

As for anyone else being in your situation - yes. Plenty of people. In fact, before recent times (and even in recent times) most people had to save in order to buy. Sometimes for years. That's life - saving for the things we want and sacrificing holidays and luxuries for it.

Five years of saving might sound like hell, but that's what's most people have had to do to get their own property. You're not the only one, I promise.

I hope that helps.

Cheers
KiKi

KimYeovil

Unless £600 of that is commuting expenses then the solution is blindingly obvious.

And why on earth are you wanting to spend £400 month-in month-out for years on a car? Buy a second hand one for less than a thousand pounds, if you must have one.

Complete madness.

westv

KimYeovil wrote: »

Unless £600 of that is commuting expenses then the solution is blindingly obvious.

And why on earth are you wanting to spend £400 month-in month-out for years on a car? Buy a second hand one for less than a thousand pounds, if you must have one.

Complete madness.

I'd suggest it'll probably be better using public transport then spend £1,000 on a rust bucket cut and shut!

chewmylegoff

£400pcm on finance on a car? just get a cheaper one. job done.

LucyTheDwarf

£400 per month on a car?!?! Are you mad? I understand the need for a car, even if living in London as occasionally one might wish to leave the city... but seriously?! Small cars are cheap even new - 7K ish.

My Suzuki Alto has £35 a year tax too, and is very petrol efficient

Francesanne

Level103 wrote: »

Hi guys,

I'm currently living at home in London, 22, paying only £300 rent, and spending about £700 on everything else (phone bills, going out, food and travel to work).

I take home £32,000 - which means £2,000 take home.

I can save probably around £1,000 a month, but I want to buy a car which will set me back with finance £400 a month (with insurance).

So that is taken down to £600 a month.

Any tips on saving for a deposit for a home?

I need to stay in Greater London, and probably looking at £175-£200,000 for a one bedroom flat.

Anyone been in my situation before?

This would basically mean no holidays for the whole saving duration also and not taking into account christmas etc.

Any tips?

You can't always have everything you want in life but I think when you're only 22 you don't appreciate that fact. You have to decide what you really want and then act. As you live in greater London, I'd really forget buying a car. That's an awful lot of money to pay out each month and that's without the expense of running it. You have a very good income and you should spend it wisely. Wish I'd earnt that sort of money during my working life but still managed to buy my own home & now I'm mortgage free.

LucyTheDwarf

The more I read your post the more incredulous I feel.


"This would basically mean no holidays for the whole saving duration also and not taking into account christmas etc." --> Holidays are a luxury right? Something to spend excess cash on. If you want a flat, you can't afford a holiday, certainly not a luxury one. However, the West Country is beautiful, and if you shop around you can get some nice deals out of season. Ditto the Lake District. Or perhaps a weekend somewhere.

How on earth do you spend £700 on phone, travel and going out? What are your essentials spends? (ie travel to work) Going out and phone bills are entirely luxuries, and are directly reducing what you save. How much do you spend on food? Have you tried brand downshifting?

Francesanne

LucyTheDwarf wrote: »

£400 per month on a car?!?! Are you mad? I understand the need for a car, even if living in London as occasionally one might wish to leave the city... but seriously?! Small cars are cheap even new - 7K ish.

My Suzuki Alto has £35 a year tax too, and is very petrol efficient

He'd be better off hiring one. An awful lot cheaper.