30 years old - am I spending too much of my salary?

londonerneedtosave

Hi guys,

I am based in London and have a pretty good job, however I don't think I'm saving enough. I would like to save up for a decent chunk of a deposit.

Currently no debts, no credit card debts.

I am on about £56k (Around $89k) and can only save about 37% of that.

Anyway after all my taxes, I get about £3272 net in the bank.

So I've done some budgeting, and it appears the following:

• Rent: £1175- Our apartment is £1625 and I pay for most of that. My gf pays £450 since she's not earning much. (36% of my net)
• Council tax: £151
• Power: £50 (approx.. I think)
• Sky TV/Internet/Phone: £42
  
• Mobile phone: £10
  
• Food £450(I think) - 12% of my net
• Dining out: £250
  

Total income: £3272

Total expenditure: £2078

Savings: £1194

p.s. dining out, food incls for my girlfriend and myself.

This doesn't includes holidays away etc. or very special dinner outs or big purchases like a new tele etc
Am I spending too much on my rent than I should be? Is this normal amount of money to be spending for my income?
I'm fairly concerned that my apartment is too expensive for my earnings.


Thanks!

jimjames

I'm confused, £1194 is not 10% of £3272? Or do you mean that £1194 is the unaccounted for money from your salary?

If it is then you could start by setting an automatic transfer on or just after pay day each month to move a set amount into a savings account. Once it has gone the tendency to spend it will be far less.

The apartment is 50% of your earnings (not including gf contribution) which does seem a high amount but it depends on the area you live, what else is around and what it would cost in other things like travel if you were to move.

londonerneedtosave

jimjames wrote: »

I'm confused, £1194 is not 10% of £3272? Or do you mean that £1194 is the unaccounted for money from your salary?

If it is then you could start by setting an automatic transfer on or just after pay day each month to move a set amount into a savings account. Once it has gone the tendency to spend it will be far less.

The apartment is 50% of your earnings (not including gf contribution) which does seem a high amount but it depends on the area you live, what else is around and what it would cost in other things like travel if you were to move.

Yeah my mistake sorry. Getting late and been working with figures all day. Changed.

We live in absolutely Central London, no cost of travel as I get free travel.

[Deleted User]

I image that that list of expenses is not too accurate - TV license, transport, holidays, clothes, haircuts, hobbies etc etc

here's the link to a more comprehensive SOA calculator:

http://www.stoozing.com/msoc/soacalc.php

If you are not too sure what you are spending where, then keep a spending diary (either in a note book or on your phone) noting down EVERYTHING that you spend from the really small things that you spend pennies on to the really big things like CTax and rent - you'll soon see where your cash goes, and once you know where it goes you can decide whether the spends are essential, nice to have, or unnecessary!

Also, based on the spending that you have listed - can you not find a cheaper flat to rent?

You are spending a fortune on groceries, especially given the amount you spend on eating out - try meal planning, batch cooking, dropping brands, try lidl/aldi, write a list of what's needed before you go and stick to it.

Also use vouchers, offers and deals for eating out when they are available.

You can afford to live where you do, and you're not getting in to debt by doing so, so in that sense you're not spending too much. But this all depends on what your priorities are, and if your priority has changed to save for a deposit more quickly, then you will need to cut back on something to make that happen!

On the income that you have it's a matter of choice rather than need to cut back.

Good luck with whichever you decide.

D9

PasturesNew

£700/month total food bill seems excessive. That means that EVERY day, without fail you're spending £23 just on eating. OK, some of it's eating out, but that means you don't need to eat so well when you're at home.

First step would be to look at what you're throwing out - and establish if you're buying a lot of food in that you're then wasting/chucking. If you buy it, you HAVE to eat it. Millions are starving....

londonerneedtosave

Domino9 wrote: »

I image that that list of expenses is not too accurate - TV license, transport, holidays, clothes, haircuts, hobbies etc etc

here's the link to a more comprehensive SOA calculator:


If you are not too sure what you are spending where, then keep a spending diary (either in a note book or on your phone) noting down EVERYTHING that you spend from the really small things that you spend pennies on to the really big things like CTax and rent - you'll soon see where your cash goes, and once you know where it goes you can decide whether the spends are essential, nice to have, or unnecessary!

Also, based on the spending that you have listed - can you not find a cheaper flat to rent?

You are spending a fortune on groceries, especially given the amount you spend on eating out - try meal planning, batch cooking, dropping brands, try lidl/aldi, write a list of what's needed before you go and stick to it.

Also use vouchers, offers and deals for eating out when they are available.

You can afford to live where you do, and you're not getting in to debt by doing so, so in that sense you're not spending too much. But this all depends on what your priorities are, and if your priority has changed to save for a deposit more quickly, then you will need to cut back on something to make that happen!

On the income that you have it's a matter of choice rather than need to cut back.

Good luck with whichever you decide.

D9

My girlfriend pays for the TV license and I'm kinda of a cheapass in haircuts - £9 :P

Holidays are not included so that's on top.

Think I need a savings diary.. as I have no idea where everything else goes.

londonerneedtosave

PasturesNew wrote: »

£700/month total food bill seems excessive. That means that EVERY day, without fail you're spending £23 just on eating. OK, some of it's eating out, but that means you don't need to eat so well when you're at home.

First step would be to look at what you're throwing out - and establish if you're buying a lot of food in that you're then wasting/chucking. If you buy it, you HAVE to eat it. Millions are starving....

I spend about £5-£7 on food for lunch and maybe £4 at evil Pret for breakfast. so about £10 just for breakfast and lunch. For dinner, we either cook at home or dine out.

I think it's not unusual for it to average out to be about £23 per day if we go out on ONE expensive dinner a week.

P.s. that also incls for my gf and myself.

YoungBusinessman

£23 a day sounds very extreme to me...each to their own though, im not judging!

londonerneedtosave

YoungBusinessman wrote: »

£23 a day sounds very extreme to me...each to their own though, im not judging!

That kind of includes my girlfriend (our combined groceries).

But yes, that seems where my money is going.

[Deleted User]

londonerneedtosave wrote: »

I spend about £5-£7 on food for lunch and maybe £4 at evil Pret for breakfast. so about £10 just for breakfast and lunch. For dinner, we either cook at home or dine out.

I think it's not unusual for it to average out to be about £23 per day if we go out on ONE expensive dinner a week.

P.s. that also incls for my gf and myself.

Eat breakfast before you leave the house!

make packed lunches - sandwiches, home made soup, salads, stews, anything left over from the previous evening. This will save you a fortune!

You could save that £9-£11 a day towards your deposit!

londonerneedtosave

Domino9 wrote: »

Eat breakfast before you leave the house!

make packed lunches - sandwiches, home made soup, salads, stews, anything left over from the previous evening. This will save you a fortune!

You could save that £9-£11 a day towards your deposit!

I do try that about 2-3 times a week, but really not enough. I need to get my breakfast sorted I think. It's a lot to spend on breakfast.