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

perth_worker

but eating food that someone else has made taste soo much better, its quicker and convenient!
I spend a lot of money on eating out

pearl123

londonerneedtosave wrote: »

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!

Where's the amount spent on clothes?

londonerneedtosave

pearl123 wrote: »

Where's the amount spent on clothes?

I've honestly spent about £200 on clothes over the last 6 months and maybe about £300 on clothes over the past year.

I'm not a big spender. Westfield hates me.

downsizer3

You need a goal I think.
I'd aim to save about 30% deposit and have a look at the kind of property you aspire to to set that budget.
Eating out about once a month is good - if you're a foodie - cook it - its cheaper! Shop bought sandwiches are a waste of money too - if you're serious about saving for a deposit you'll soon grudge all that.
Set the target and work out how much you can put away each month by completing a SOA. If you set up a spreadsheet and see how long it'll take you - it'll encourage you to reduce the timescales by economising. You don't need to stop having a life but wasting money isn't helping anyone except Pret.........

Arthurian

Try Morrisons at Chalk Farm, Camden. Frequent buses stop right outside, easy to plan your journey from central London on tfl.gov.uk. There's a
cafe
so you could do a big weekly shop and eat there on one night a week.

edinburgher

You've got a good salary, which is half the battle.

Summing up what others have said:

1. Write a detailed SOA, you're missing out lots of little things/irregular expenses that need to be considered
2. Set specific goals for *you* (so not a 'general' deposit amount that might work - the amount that you will need to buy the home that you want/expect)
3. Start off with small lifestyle changes to save money and incorporate more as you feel comfortable

alexanderalexander

londonerneedtosave wrote: »

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

Why did you provide a conversion into US dollars for your salary? (this isn't meant as a snipe, I was just genuinely curious!)

londonerneedtosave wrote: »

SIZE=2][*]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)

I live in zone 1 London myself so I am aware that rents can be expensive, but £1625 does sound a lot. You can get plenty of decent one-beds in outer zone 1/inner zone 2 for around £1300.

Also, I realise that I am straying into sensitive territory but you have made it clear that you are financially supporting your girlfriend to a significant degree. If you were splitting rent, bills and other costs equally, you personally would be saving a lot more money! Can you persuade her to get a better paid job, or to pay a bit more towards things? (as you are effectively sharing your finances, you probably need to do the moneysaving thing together as a couple!)

londonerneedtosave wrote: »

What's considered a decent deposit? If I want a say £350k property does that mean I need about £87k for a 25% deposit? Is that considered decent?

Perhaps that could be a goal for me...

A 20% deposit should get you a competitive mortgage rate. You can get mortgages with a 10% deposit, but the rate will certainly be worse.

racing_blue

At 36% of net I think the OP is spending a lot on rent. Paying £19,500 per year to rent an apartment- that's about three times the current cost of a £200k IO mortgage isn't it?

YoungBusinessman wrote: »

50% throughout working life would see a wasted life.

YB, some might say wasted, some might say structured! Investing a large proportion of net income throughout working life gives the option of choosing to have a much shorter working life. I accept that this requires a lower level of consumption, which doesn't float everyone's boat. But talking of boats, that's how I'll be spending my time when I hit 50! Is the sun over the yard arm yet, anyone?

Jegersmart

On the subject of food I think it important to stress that good quality organic food, food that is fresh without preservatives such as nitrites (pork especially) and investing in a juicer should be priorities for anyone who can possibly afford it. Our food production chain is so farked up now that we are ingesting chemicals, contaminants and all kinds of carcinogens on a continual albeit low dose basis. This is starting to show up in increased cancer rates and other auto-immune and chronic conditions and this will keep climbing in the future. I personally believe that investing in a diet based at least 50% on raw foods such as organic vegetables and fruit is key, and also remember that the drinking water in major cities like London (where I also live) are quite contaminated by hormones from contraceptive pills etc which the water treatment plants do not remove very well which I am sure will have some effect over the longer term.

I don't want to come across as a complete !!! about this, but going to Aldi and buying "value" or other crappy brands without any nutritional value in them is a recipe for disaster potentially over one's lifetime imho. I am not saying that you need to spend £23 per day on food as a result, but you should be aware of what you are eating and willing to pay extra for good ingredients and organics.

I am 10 years older than you but your salary is very good for your age. I am also renting at the moment and note that my rent is 10% higher than yours but my earnings are almost triple, but then I also have far higher costs in terms of cars and so on.

The main thing is that you are thinking about this now and that is the first step to take action if necessary/possible. Please do consider the dietary side though, don't start eating crap to save a couple of hundred a month - if you don't have good health then everything else is worthless.

HTH

J

chewmylegoff

Rather than trying to work out a strange theoretical figure of how much you save based on guessing how much all your costs are, why not look at how much you have actually transferred into a saved each month for the last 6 months, that will be a rather more accurate indicator of how much you are really saving.