Can I afford to live alone on £18k?

scheming_gypsy

What is it you do in IT if the highest you can get is 18k? has to be first line as there are better IT rates than that in the North West. You might just have to travel a bit further but if you're second line or higher then 22k is average up here these days (although even that's too low).

As well as working out if you can live on that amount of money, you also have to decide if you want to live on that amount of disposible income. What if you need a new car tyre, you want to decorate or you want to do something instead of sitting in all night.
It's very possible to live on £18k with a mortgage but it's leaving you little spare for a long time when you don't 'need' to buy a house and live on that.

OrkneyStar

Cloudane wrote: »

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?

I'd say you have set quite a realistic budget however:

1. You need to put more aside as a house/car repairs fund. Bear in mind things can break (boilers, washing machines, cookers etc) and you don't want to have to buy them on credit and pay them up, hence paying more for them!
2. Food @ £150, while some have said you should be able to spend less I would leave it at that but aim to spend less. Then if you do have anything left over at the end of the month you can put it toward another budget (and feel smug smug lol .

Have you saved up for a deposit/lawyers fees etc or are you still doing this ?
All the best.

picklepick

As far as I can see you only have 3k in savings, so you are in no where near a position that would allow you to be buying a house. On your salary I don't think that you're very likely to get a mortgage without a pretty hefty deposit. We have a mortgage based on my husbands wages of 34k. Our house cost 105k and we needed a 25k deposit to get a mortgage. Even then we were turned down by some big lenders. Then of course, you need to factor in the costs of surveys and solicitors fees. On top of that, you'll need savings for 'when things go wrong'. Boiler breakdown, appliance breakdown, general upkeep of your property, etc. Also, take into account how much your car insurance will change between postcodes.

I'd say, stay at home, then save, save and save some more!!

nappentass

FWIW - I respectfully suggest that you really need to find out what it's like to live on your own first, perhaps consider trying a couple of options like living in a shared-house (IMHO essential if you ever consider having a lodger!) &/ rent a place on your own for say 6 mths or a year.
Why commit yourself to a 25yr mortgage, when you don't even know if you'll cope with living alone?
Think of all the possible things that might happen over those years -
what if you end up out of work? what if you end up ill or incapacitated?
My parents used to say 'a house has a big mouth' - please don't learn the hard way how expensive it can be and over commit yourself without being sure you are ready
hth

Cloudane

@redlady_1 - yeah I guess you're right, I don't exactly have control over the economy. As long as it's not going to suddenly shoot up from 400 to 585/month like someone was suggesting!

@misskool and HappyMJ - best way I saw it mentioned somewhere is that it's about trying to keep the same standard of living before and after retirement. I could blow it all on living to a high standard before and then end up with a low one later (irresponsible), live on a low one now and end up with a high one later (tedious, and I could get hit by a bus before then) or try to balance it out. For now I guess that might mean having fairly small retirement savings, but not neglecting them altogether.

@rachbc - at this stage I'm ready for the drop to more thrifty times in exchange for full independence. I suppose some part of me (I'll be honest, a big part of me) is caving in to the social stigma of living with your parents past 30, but I do tend to think that the time is right and that it's something that needs to be done for me to develop as an individual. I think that if I stay with my parents forever I'll be a "big child" forever.

@quintwins -yeah, I should probably try to save a good way past the deposit and costs of moving in, if I can, so that I still have some savings left.

It's not become suddenly urgent, so it's reasonable enough to spend a couple of years saving if need be. What I will do is try to follow the suggestion of saving an amount equal to how much more it would cost compared to life now (I calculated this at roughly £650/month on top of what I already pay for car, food, clothing and board.. it'll be interesting finding that but that's what I'd have to find if I did it so it's a perfectly sensible suggestion). That would add up at a decent speed.

And yeah it sounds like things like the food budget can come down a little. Besides, I need to lose weight
At the same time it sounds like some other things need to go up.

@scheming_gypsy - I'm quite a shy person, which is an expensive problem (companies pay a lot more for people who are good extroverted communicators and are a lot more willing to hire them in the first place). I'm glad to have a job at all

At the moment I'm one of two people in a company's IT department. To get much more than this, I probably need to move into an actual specialist IT job. I don't know... maybe I need to concentrate on career development first (if I move into a house, get a new job and fail the probation period, I'm FUBAR'd). It's tough knowing how to prioritise everything especially with tending to be late at doing things, and with the way things are economically at the moment with there not being many better paying jobs up for grabs.

@OrkneyStar - yeah it's sounding like the overall budget is about right but some of the allocations might shift e.g. less on food and more on the 'smaller' allocations like repairs and the dreaded xmas.

Still in the process of saving.

@picklepick - hmm. Not too encouraging, but the brutal honesty is appreciated.
It just concerns me that I'm nearly 30 and haven't made any progress on this kind of thing. The thought of staying with my parents until I'm 40+ is kind of embarrassing... well, they do treat me as an equal and I get on with them great, but going back to that social stigma thing. (and kicking myself out of a comfort zone)
Maybe I need to swallow my pride and just stick with it. I really don't know.

Renting was another thought but the day to day costs would be about the same (renting costs here start at £350pcm from what I have seen)

@nappentass yeah not too bad an idea renting for a bit first. Probably after I have saved up decently though (won't be able to afford to save up if it's all going on living costs!)

patchwork_cat

You are working under a misapprehension. The valuation bands for council tax are based on valuations in 1991. The 68 to 88K band d property is now perhaps £200/250K. Our 4 bed detached is a band d! My MIL's £100k+ terrace is a band A.

Cloudane

patchwork_cat wrote: »

You are working under a misapprehension. The valuation bands for council tax are based on valuations in 1991. The 68 to 88K band d property is now perhaps £200/250K. Our 4 bed detached is a band d! My MIL's £100k+ terrace is a band A.

Yep, caught that eventually a few posts back - thank goodness! That's one good thing at least - the kind of thing I'd be looking at starting with is band A.

LameWolf

Cloudane excuse me butting in, but I'm assuming you're a reasonable cook? It's just I didn't notice it mentioned anywhere; do make sure you know how to make a reasonable variety of cheap, nutritious meals for yourself before venturing out on your own.:o Sorry if I'm stating the obvious - I'll get my coat.;)

guineapig

I bought my first house ( a back to back terrace with no garden) I was 19 single and female, this was very rare back in 1977!

I was earning the equivalent of minimum wage at the time ( if memory serves) and times were very hard.

Food seemed to be much more expensive then and I couldn't even afford charity shop clothes!

I had to learn frugality and all the stuff that you now find out on the internet, the hard way, by myself.

I lived on tins of baked beans and sardines and cheap fruit from the market. My diet was healthy but boring!

I had friends and our ONLY social events were us taking turns at cooking a meal for each other one weekend evening. We couldn't afford to drink and the only time we went to a pub was when our boss took us out if it was someone's birthday/christmas.~He paid

I had no washing machine and "stomped" my washing in the bath and hung it up on a clothes horse, it took forever to dry.
Eventually I saved up enough to buy a spin dryer, which was fantsastic, but it took me about 5 years before I could afford the cheapest washing machine!

Even in those days I was paranoid about being able to pay my bills so I saved a tiny amount each month by cutting down where I could.

I still ended up with a dilema when my roof got damaged and I had to pay to get it fixed.
That was one of the only 3 times in my life that I got a bank loan ( the little I was saving had to go on servicing that). I learned the hard way about house insurance!

When I first bought the house the mortgage rate was about 6 or 7 % but actually reached the giddy heights of 15% ( briefly)
I was fortunate ( and paranoid enough) to have worked out what would happen if this were to come to pass ie. Could I STILL afford the mortgage? Yes, I could and I did, but it wasn't easy and a LOT of people lost their homes when the mortgage rate went that high.

From then on, I decided that ok 15% is a drastically large amount, but any future mortgages would be based on me being able to KEEP paying the house IF the rate went back up to that.

I would hope it never would, but, you don't want to lose your house based on todays very low rates.

I had NOTHING of value except my independence, it was amazing to think that I had my own place and only I was the one who had a say in how I did things.
It was truly priceless:)

I carried on working full time and went to University part time too ( I am very proud that I did that when I was so young).

You REALLY need to be self aware, ask yourself some tough questions:

Will I ( when the "novelty of independence" wears off) RESENT, being house rich and money poor?

Will you resent not being able to go on holiday, not be able to go out drinking/socializing with your friends?

Do you have hobbies that cost money?

What would you do if your car was fubar'd ?( Heaven forbid!)

I would SAVE and LIVE NOW as if I was PAYING for a house, that way you get a "taste" of what it's like to have less money and see how it "feels" over a prolonged period of time. ( Hard to do when it's not "real", I get that, but until you see what it's like to have most of your money spoken for, you won't have much perception of living on very little disposable income)

FWIW I think it is always better to "overestimate" outgoings, they can ( and do) bite you on the bum from time to time!
These days I STILL over estimate, eg. I have always budgeted for my gas bill to cost me about £85 a month and for a long time it has been £55 on Direct debit budget plan, BUT there has been an increase of 25%, I can still afford to keep warm ( and keep my chosen temps) because I built in a contingency.

These days I have a contingency for everything, as soon as I buy a new washer I start saving up for the next one! ( by "charging" myself a small amount each time I use it, this money is taken from my houskeeping/food budget.)

It is much harder these days to get a foot on the ladder, saving is the key and that means delaying gratification ( no nights out/CD's/designer clothes/fancy holidays etc.)

My early experiences meant I have been frugal ever since and managed to pay off the mortgage of a tiny detached house at age 43.

I do understand the stigama of still living at home at your age, but they reckon the average first time buyer is about 37 so don't beat yourself up!

If you were my son, I would say, save like stink, learn to cook, iron and clean frugally and well, learn to shop ( it's an art form!) Save your £1 coins in a jar, when you have a few quid in there, THEN treat yourself to a meal/night out etc.~ something I still do LOL!

I admire that you want to leave home, when you don't "have to", but still advise you to research/save and maybe learn some DIY skills at evening classes.

I wish you all the best and hope you get what you want!

[Deleted User]

I live in a tiny terraced house in north Kent 40 odd miles from London.and my council tax is a 'b' and is just under £850 per year.My Gas and electric is £31.00 per month and I am £292 in credit at the moment .I can live fairly well on around £100 per month for food as there is only me to feed.My biggestest expence is my deisle as my car is essential for getting around in I am a widowed pensioner on around £12k per year True I have no mortgage but with careful budgetting I have a weeks holiday in the spring and a fortnight with my DD and family in the summer.I would say that if you can afford to save as much as possible towards your deposit then do so as rented which does have its advantages also to me is money down the drain.