Can I afford to live alone on £18k?

Cloudane

Don't know where to put this so I'll try here

I'm 29 and thinking I'd kind of like to be independent and get my own place instead of living with my parents forever. Don't get me wrong, it's great - I have loads of disposable income and luxuries and they really don't mind (in fact when I mentioned this they were just concerned they'd done something wrong!). But I just feel that if I don't get a move on soon I will be well, frankly, a manchild - for the rest of my life.

I'm on a salary of £18250 (monthly £1237 net), in a fairly expensive area (but would really like to stay here) and single. I'm in IT work but the jobs around here don't really pay much more than this.

But can't see how I can afford to if I calculate it realistically. Here are my calculations per month (some things are annual so divided those by 12). This is without any saving for the future (i.e. no pension or equivalent savings) and before the costs of going out or 'luxuries' like beer.

Mortgage £400 (on a £65-80k little terraced house)
Council tax £125 (average band 'D' in my area)
Insurance £35
Gas+Electric £120
Water £35
Food £150
Internet £15
Laundry/toiletries £10
Car insurance £30
Petrol £55
Car tax £10
Car MOT+maintenance £10
TV license £12
Phone line / calls £15
Mobile £10
Clothing £10
Gifts/xmas £15
Misc bits/repairs/etc £10
That comes out at £1067, with a disposable income of £170.

If I was to save for my eventual retirement (should've started ages ago right?) I'd have to be saving like £150/month to be anywhere near the recommended "age/2%" leaving me with £20. If anything costs a bit more than I expected, that's that gone!

From searching around £200/month seems to be a more accepted figure for food costs. The figure of £120 for gas+electricity is probably a bit optimistic.

I could rent for £300 if I dig around, but for the sake of saving 100 it doesn't seem very sensible when it could be going towards owning something.

Should I just stay put until a miracle happens and I get a well paid job or something?

Bogof_Babe

I'd say food should cost a single person no more than £100 a month, unless you intend to eat out a few times a week.

Do you have any savings for a deposit if you want to buy?

BitterAndTwisted

How much are you saving a month while you're still living at home with your folks?

The most sensible thing to do is to put away the difference between what you're paying to live at home now and what you estimate it would cost to live alone according to the breakdown you've done up there. That is the only way to know whether you could afford it and have the self-discipline to do it.

Food £150 If you're sensible and careful you food costs could be half or even a quarter of that.

Laundry/toiletries £10 I believe that this is a huge over-estimate

Never forget that if you buy your modest wee house you could find yourself a lodger and charge them £300 a month. This is the way lots of people manage to afford to buy on their own in the early years.

rising_from_the_ashes

I guess it depends on how much you like your lifestyle as it is now compared to how much you want your own place.

What do you do with the disposable income you have? (ie do you have a deposit saved etc?)

• Not sure where you've got some of your figures but I'd say the mortgage cost was quite high - what will your LTV rate be? (As a comparison mine is £70k and I pay around £300/month)
• Gas/elec are HUGE - mine are only £70 together and my house is bigger
• Insurance... (although obviously dependent on area/size) mine is only £15/month.
• Although I don't have water rates to pay, from looking at SOAs on the DFW boards, £35/month seems high for a single person too.
• Council Tax D seems high for a terrace....
• £150 for food & £10 for toiletries is also quite high - have a look at the grocery challenge for tips as there are couples who manage on less than this (it can be done if you're careful, bulk buy, buy on offer, cook from scratch etc)

I'd say do a bit more investigating on costs - do you know anyone who lives in a similar place that you could ask. HTH:)

cte1111

I think your best best is to either rent or buy somewhere with 2 bedrooms and rent out the second one. Bear in mind that if you are sharing a house, then the other bills will also be split between other people.

NB I don't think £120 is unrealistic for gas and electricity, ours is £125 for a 5 bed house with 2 children and 2 adults so yours should hopefully be lower for a smaller property and fewer people.

MandM90

I also agree you could eat for much, much less. Have you already saved for a deposit? Could you stay at your parents a longer, be really frugal and save more and cut down the mortgage you would need? Have you considered buying a place then getting a lodger to help with the mortgage payments?

Sorry to go OT but where do you live? 60-85k for a terraced :eek: You're lucky to get one for under double that in the bad parts where I am

Also for our modern flat and a household of two adults and a child the electricity (no gas, all electric) is only £60 a month, so it obviously varies; something to think about when moving. Perhaps even in a big place you could cut that with insulation and switching things off more than you're used to.

lizzyb1812

Do you have savings? Have you a deposit for a house/a good chance of getting a mortgage? How does a terraced house of £80k get into a council tax band D?

£150 is plenty for food if you learn to cook and you should really have no problem getting it to £120 or less.

Your clothing/gifts/misc budgets look too small.

Have you got money for furniture etc?

Sorry for the disjointed reply - these are just what I thought off the top of my head . And no need to answer - it's just stuff you need to think about.

If you decide to stay at home you could always start saving hard so that you could set up home in the future on a firmer footing.

JulieGeorgiana

Can you really get a mortgage at £400 a month??? Definatly think about a bigger house and rent a room for £300!

I pay £600 a month rent!

Gas+Electric £120

I pay £80 for a 2 bed maisonette, 2 adults, 1 child... might be a little high

Food £150
Laundry/toiletries £10

I have £50 a week for 2 Adults, 1 Child, 2 Cats and 2 Rabbits... this includes food and sundries.

Clothing £10
Misc bits/repairs/etc £10

I have £40 a month for this... but as I rent this doesn't fixing things which break in a house I own!

Gifts/xmas £15

Are you sure this is right? Have you worked out how many people you buy for a set a budget and divided by 12? I also add christmas 'expenses' to this budget... like cards/ wrapping paper/ art supplies/ work 'dos'

HappyMJ

Cloudane wrote: »

Mortgage £400 (on a £65-80k little terraced house)
Council tax £125 (average band 'D' in my area)

It's more likely a little terrace will be band A. Also you get 25% off so £125 a month becomes £73 a month for 10 months. Feb and Mar payments are not due.

caeler

Hi OP - I live on my own in a small 2 bed terrace (new build) and my energy bill is £60 (Gas + Elec) and my water is £15, I'm on a water meter. My house is a band B which for me means in my area £84 a month with discount over 10 payments. My BT phone line, evening and weekend calls + broadband is £23pm. My home and contents is approx £150pa. I generally keep the weekly shop under £30 a week, with some weeks far less. Like others have said, you could consider a lodger or even rent first just to make sure you can cope. Save as much cash as you can and be out of debt or you'll never manage.

Somebody mentioned furniture - freecycle is a great place, check your local one out.

Cloudane

Wow thanks for the all the replies! You're all VERY helpful... It's tricky to reply to everyone individually without making a huuuge post (this already is) so I'll summarise but all the inputs are very much appreciated.

I wouldn't be bothered about eating out much. Maybe once a month if I can afford it, and same story with a night out every Saturday if I can afford that. Those are big 'if's. I think I'd definitely want to socialise once a week - no point in not being a big child if I can't get out to show it heh. But it's not like it's essential.

Savings, I have £3k now and am putting away £250/month currently. I'm going to see if I can increase that - being out within 2 years isn't bad, but trying to save as much as it would cost seems like a good idea, as tempting as it is to continue living in luxury until that time.

I was going to start a pension first but I guess with these new plans that might be best on hold for now to give me as much as possible to save. Haven't signed anything but was well into the process of getting advice at the cost of £500 which I guess I may still have to pay, OUCH, but we live and learn.
I'm aware I'd need 10% deposit plus money for furnishings.

Ideally I'd like to live completely alone for a bit, but thinking realistically - if I struggle, a lodger is always an option.

Good to know some of the big costs (food, gas, elec) might be a bit overestimated. I tend to be quite pessimistic so that I don't get caught out. I'd probably find a way to get by without much heating - I've been known to go camping in the middle of winter

Council tax - honestly I have no clue but it is an expensive area, right on the edge of the Lake District. I'm going by this page http://www.southlakeland.gov.uk/default.aspx?page=842 which would put me on band C or D depending on where in that 65-80k value it'd sit. I had a quick look on rightmove and there was a cheap (albeit a bit haggard looking) terraced for 65 and one a bit nicer for 80. Maybe there's a catch if both of these seem a bit low - I was surprised myself as I thought I'd never be able to manage it in the first place until I saw those. It's quite a nice area in Cumbria, am I being overly optimistic in the first place?

(Don't really want to move away - my life and friends are here)

I do know someone living somewhere similar in the same town and will be asking him next week what his costs are like.

Clothing/gifts/misc could probably be increased by what food and energy is decreased by heh, so maybe the overall guesstimate isn't far off.

Furniture and appliances - I'd buy second hand to start off. There is a furniture reuse centre nearby that I used to work for who I could get a good deal from (I dare say if they have some computer issues to help with I could get a few freebies or big discounts) so I'm not too worried there.

Thanks again for the efforts so far!